"There will be deflation forces continuing to assert themselves in the weeks and months ahead"
Gold fell on Wednesday to just above $1,700 an ounce, after the U.S. Federal Reserve stuck to its plan to keep stimulating growth until the job market improves but made few surprises in its policy statement.
The Fed also repeated its vow to keep rates near zero until mid-2015 and its pledge to keep supporting growth while the recovery strengthens. It also made no change to its plan announced in September to buy $40 billion in mortgage-backed debt per month to put interest rates down.
The metal, which briefly dropped below $1,700 an ounce earlier in the session, has been pressured by worries about a U.S. economic slowdown which also slammed equities and commodities this week.
Bullion, a traditional inflation hedge, has lost 1.5 percent since Monday.
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Gold is starting to adjust to the reality that there will be deflation forces continuing to assert themselves in the weeks and months ahead," said James Dailey, a portfolio manager at TEAM Financial Asset Management.
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