Gold fell on Thursday as a dollar rebound offset bullion support from a relatively less aggressive stance by the US Federal Reserve on interest rate hikes.
As expected, the Fed raised its overnight benchmark interest rate by 50 basis points, the biggest hike in 22 years. However, Powell said he was not considering 75 basis point moves in the future.
Spot gold fell 0.3% to $1,875.41 an ounce, after hitting its highest level since April 29. US gold futures gained 0.4% to $1,876.30 an ounce.
The dollar index gained 1.3%, boosted by safe-haven inflows as Wall Street retreated, while the 10-year Treasury yield rose.
“The gold market is losing altitude due to strong gains in the dollar index and rising bond yields, and the market may have realized that the Fed will have to remain aggressive with the interest rate hikes to control inflation,” Kitco principal analyst Jim Wycoff said.
While gold is perceived as a hedge against inflation, higher US interest rates and Treasury yields raise the opportunity cost of holding bullion, while boosting the dollar in which it trades. the precious metal.
Among other precious metals, silver fell 2.7% to $22.35 an ounce, while platinum lost 1.7% to $974.25 and palladium fell 3.4% to $2,178.81 an ounce.