Fed now projects first rate hike in 2023
U.S. dollar advances to twomonth peak
Gold fell over 2.5 postFed announcement on Wed Updates prices, adds comment
June 17 Reuters Gold slipped below the 1,800 level on Thursday, after the Federal Reserve signalled earlierthanexpected interest rate increases.
Spot gold fell 0.8 to 1,797.25 per ounce by 1124 GMT, having touched its lowest since May 6 at 1,794.19.
U.S. gold futures fell 3.3 to 1,799.80 per ounce.
A majority of 11 Fed officials projected at least two quarterpoint rate rises for 2023, even as officials in their statement pledged to keep policy supportive for now to encourage a jobs recovery.
The announcement on Wednesday prompted a 2.5 slide in gold with the dollar hitting a twomonth high and yields also jumping.
Along with the Feds unexpected change of stance, higher interest rates in the U.S. while other major central banks probably are going to wait longer with changing monetary policy has strengthened the dollar. So its a double whammy for gold, Quantitative Commodity Research analyst Peter Fertig said.
Higher interest rates raise the opportunity cost of holding nonyielding bullion.
For now the market trusts the judgement of the Federal Reserve on inflation being transitory and until data potentially proves them wrong, gold and also silver may face another challenging period, Ole Hansen, head of commodity strategy at Saxo Bank said in a note.
Adding to golds headwinds, the U.S. central bank also said…