Fed Rate Hike Sends Gold and Silver Prices Lower

The US Federal Reserve's decision to raise its benchmark interest rate by 25 basis points has had an immediate impact on gold and silver prices. COMEX gold fell by 0.88% to $4,348.90 per ounce, while silver declined by 0.90% to $64.335 per ounce.

The Fed's decision also signalled that another rate increase could follow later this year, with policymakers expecting the benchmark rate to rise to 4.1%. This has shifted the focus for bullion investors from the rate hike itself to the Fed's outlook for further tightening, US Treasury yields, and the dollar.

According to Prithviraj Kothari, managing director of RiddiSiddhi Bullions and president of the India Bullion and Jewellers Association, much of the expected rate hike was already priced into gold and silver. The market's attention would therefore turn to the Fed's projections and commentary.