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Gold dives below $1200
On Thursday, gold declined below the psychologically crucial $1,200 mark gaining minor support after the key US bank had interest rates lifted and added that it’s on the verge of proceeding with its monetary tightening into 2019.
On Wednesday, the Federal Reserve had interest rates raised by a quarter point. Now it accounts for 2.25%. It appears to be its third rate lift in 2018 and also eighth since 2015.
In its statement, the main US financial institution told that it’s still planning another rate lift in December followed by extra three next year, and also another lift in 2020.
The Federal Reserve omitted the word "accommodative" in its statement to illustrate its monetary policy stance, telling that the change doesn’t indicate any change in the Fed’s path toward normalizing its monetary policy.
On the Comex exchange in New York December delivery gold futures demonstrated an outcome of $1,199.60.
In the immediate aftermath of Wednesday’s rate lift prices went down to a two-week minimum of $1,194.7, before regaining some poise to conclude the trading session a bit changed.
Gold was still pressured because demand for the evergreen buck was backed, with the USD index, gauging the evergreen buck’s purchasing potential versus a basket of six main currencies, added 0.22% being worth 94.09.
The prospect of further interest rate lifts as well as higher American bond gains affected appeal for gold that offers no yield. As a matter of fact, they tend to spur the evergreen buck, thus making dollar-denominated gold less affordable for those who keep other currencies.
Prices of the most popular precious commodity have slumped by 11% from their April maximums.
December delivery silver futures slumped by 0.37% coming up with an outcome of $14.44 a troy ounce. At the same time, January delivery platinum futures hit $82.6, soaring by 0.42%.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.