Kitco News) - At the end of the Federal Open Market Committee meeting Wednesday afternoon, the Fed is expected to announce “Operation Twist” which would extend the duration of maturities on its balance sheet and try to lower long-term interest rates. Tom Pawlicki, analyst at MFGlobal, says this could be bearish for gold. “We don’t anticipate that it will offer much impact on gold prices. If anything, it may be negative because the risk of monetization won’t increase as the size of the balance sheet remains static,” he says. Further, it may already have been discounted by the bond market. Pawlicki says the spread between 10-year and 3-month yields has shrunk from around 3% in early-July to near 2% currently. “Expectations of Twist increased over that period as did the expectations for QE3. Gold prices have fallen since QE3 was not suggested by Fed Chairman Bernanke in his Aug. 26 speech at Jackson Hole,” he says.