Gold prices on Thursday saw their biggest drop in nearly two months while snapping a five-day winning streak as a surging U.S. dollar weighed on precious...
Gold prices on Thursday saw their biggest drop in nearly two months while snapping a five-day winning streak as a surging U.S. dollar weighed on precious metal prices.
Price action Market drivers The U.S. dollar continued to climb on Thursday, driven by the Federal Reserve’s projections showing it intends to keep its policy interest rate above 5% through 2024. In addition to weighing on U.S. equity futures, the rise in the dollar pushed gold prices sharply lower. The ICE U.S. Dollar Index DXY surged 0.1% to 105.31, its highest level in more than six months.
“The Fed’s hawkish hold didn’t prove too popular with gold bulls either despite some apparent optimism ahead of the release. Gold rallied toward $1,950 in the run-up to the decision, in line with the highs from earlier this month, before giving all of the day’s pre-release gains back and ending it in the red,” said Craig Erlam, senior market analyst at OANDA, in emailed commentary.
“It’s trading a little lower once more and, depending on how seriously traders are taking the Fed’s dot plot, could be at risk of testing last week’s lows around $1,900.”
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