Gold prices retreated on Thursday as the US dollar and bond yields powered higher after the Federal Reserve signaled another rate hike this year and lesser chances of monetary policy easing through 2024.
Spot gold eased 0.1 percent to $1,927.63 per ounce, while US gold futures shed 1 percent to $1,947.80.
Prices on Wednesday hit their highest since Sept. 1 before the US Fed revised its economic projections with higher-for-longer rate warnings.
“Commentary signaled rates will likely stay higher for longer, which saw the market price-in reduced rate cut expectations from the Fed funds rate through 2024, which we see driving downward pressure to gold prices in the near term,” NAB Commodities Research said in a note.
The US dollar index climbed 0.4 percent to its highest since March 9, while two-year Treasury yields rose to 17-year high after the Fed held interest rates steady but stiffened a hawkish monetary policy stance.
The Fed sketched a stricter policy path moving forward in an inflation fight they now see lasting into 2026, but believe they can succeed in lowering inflation without wrecking the economy or leading to large job losses.
