Gold prices drop on concerns over US Fed\'s

Gold futures prices on the COMEX division of the New York Mercantile Exchange fell Tuesday on concerns over possible scale-down of bond purchases by the U.S. Federal Reserve. The most active gold contract for August delivery dropped 16.2 dollars, or 1.17 percent, to settle at 1,366.9 dollars per ounce. The Federal Open Market Committee (FOMC) started a two-day meeting Tuesday. Though most analysts do not expect the Fed to announce any cut back of its bond-buying program immediately, market speculation on possible tapering began to accelerate as some Fed officials started to support reduction of assets purchases last month. Investors will closely watch for any comments by the Fed about the future of the monthly 85-billion- dollar bond purchase program. Economic data released Tuesday were also mixed. The U.S. Commerce Department reported that the construction on new U.S. houses rebounded 6.8 percent in May to a seasonally adjusted annual rate of 914,000 after a large drop in the previous month. The U.S. Labor Department said the consumer price index posted a monthly rise of 0.1 percent in May after dropping for two months. Silver for July delivery lost 8.1 cents, or 0.37 percent, to close at 21.677 dollars per ounce. Platinum for July delivery gained 5.3 dollars, or 0.37 percent, to close at 1,440.1 dollars per ounce.