Gold drops 2% as Fed reduces monthly bond purchases to $55 billion.

By late-afternoon the precious metal was trading at $1,329 per ounce, a 2% drop on the previous day, and its lowest point so far this month.

Following a meeting of the Federal Open Market Committee (FOMC) on Wednesday, the Fed wrote in a statement that since its last meeting in January "labor market indicators were mixed but on balance showed further improvement."

"The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable."

The gold price has been dropping over the past three days after the situation in Ukraine simmered, lowering demand for gold as a safe-haven asset.

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