Gold prices fell on Tuesday after the International Monetary Fund hiked its global growth forecast for this year and solidified expectations for central banks to unwind stimulus programs that have bolstered gold prices since the 2008 financial crisis.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,242.30 a troy ounce during U.S. trading, down 0.77%, up from a session low of USD1,235.40 and off a high of 1,255.50.

The February contract settled up 0.94% at USD1,251.90 on Friday. There was no settlement on the NYMEX on Monday due to the Martin Luther King Jr. Day holiday.

Futures were likely to find support at USD1,233.90 a troy ounce, the low from Jan. 15, and resistance at USD1,261.30, the high from Jan. 19.

In revisions to its World Economic Outlook report published on Tuesday the IMF said it expects the global economy to grow by 3.7% in 2014, up from an October forecast of 3.6% growth.

The news fueled expectations for central banks to wind down stimulus programs such as bond purchases going forward, the Federal Reserve especially, as the multilateral lending institution predicted the U.S. economy to expand 2.8%, up from an October forecast of 2.6%.

Many market participants expect the Fed to trim its quantitative easing program to USD65 billion from the current USD75 billion at its next policy meeting on Jan. 29.

Fed bond purchases aim to prop up the economy by suppressing long-term interest rates, thus weakening the dollar as a side effect as investors flock to asset classes like stocks, which makes gold an attractive inflation hedge.

Since the 2008 financial crisis, the Federal Reserve has rolled out three rounds of quantitative easing to prop up the economy.

The current program began in September of 2012 and saw the Fed initially buy USD85 billion in Treasury holdings and mortgage debt a month from financial institutions.

Meanwhile, silver for March delivery was down 2.04% and trading at USD19.890 a troy ounce, while copper futures for March delivery were up 0.18% and trading at USD3.351 a pound.

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