This morning, during Asian trade hours, gold futures fell lower. Overnight the U.S. Federal Reserve Board hiked interest rates, as expected. They also took a more hawkish tone signaling at least two more rate hikes this year instead of one.
There are also lingering trade war tensions. The spat between Washington and Beijing is still brewing. This prevented steeper losses of the yellow metal.
As of 1 am GMT, Spot gold futures (XAU/USD) were lower. They lost 0.1 percent from there last close. They were trading at $1,298.61 per ounce. They had hit a better than one week low at $1,292.15 an ounce during the previous session.
U.S. gold futures, for August, were up. They gained 0.1 percent to trade at $1,302.60 per ounce.
Gold Traders react to Yesterday’s Fed Rate decision and Comments
As expected, on Wednesday, the U.S. The Federal Reserve raised interest rates. This rate hike was a milestone. It shifted the Fed’s policy to combat the effects from the 2007-2009 financial crisis and recession to a policy of normalcy. The Fed also projected two more rate hikes in 2018. That would be a total of four. This is up form three. They also project three rate hikes in 2019.
Looking at U.S. economic data, producer prices rose more than expected for the month of May. This was its largest annual gain in more than six and a half years. This signals that there is a solid gain on of inflation pressures in the World’s largest economy.