Gold
prices finished Thursday at their lowest levels in three weeks, a day
after the Federal Open Market Committee left the door open to hiking
interest rates at its December meeting.
Gold
for December delivery dropped $28.80, or 2.5%, to settle at $1,147.30
an ounce on Comex. That was the lowest settlement since Oct. 8.
Prices
had settled at a one-week high on Wednesday, but then turned lower in
electronic trading after the Fed statement was released at the close of
the central bank’s two-day meeting.
The
market had been fairly convinced that the Fed would hold off on
interest-rate hikes this year, but a more hawkish-than-expected
statement took the market by surprise. The CME Group’s FedWatch tool
shows investors are pricing in a 50% chance of a rate increase at the
December meeting, scheduled for Dec. 15-16.
Gold
has been a beneficiary of the Fed’s ultraloose monetary policy because
commodities like gold don’t offer interest. The dollar also saw a sharp
move higher late Wednesday, and that also can drag on dollar-denominated
currencies like gold. The dollar hit its highest level against the euro
in nearly three months Wednesday, but has since pulled back.
On
Comex, other metals ended sharply lower. December silver futures
dropped 74.3 cents, or 4.6%, to $15.55 an ounce, while December copper
lost 4.2 cents, or 1.8%, to $2.321 a pound.
Source: MarketWatch
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