Gold Plummets as Fed Hikes Rates and Signals Further Increases

Gold prices plummeted by over 1% on Wednesday after the US Federal Reserve raised interest rates and signaled further increases in borrowing costs. The Fed hiked its benchmark overnight rate to a range of 3.75%-4.00%, with Chief Kevin Warsh emphasizing the need for price stability.

Spot gold fell 1.2% to $4,240.1 per ounce, while US gold futures for December delivery settled 1.3% higher at $4,387.50. The dollar rose against the euro after the Fed's announcement, making gold more expensive for overseas buyers.

Tai Wong, an independent metals trader, attributed the decline in gold prices to Warsh's hawkish comments and the dot plot, which suggests additional rate hikes in upcoming meetings. This has put pressure on gold and other metals in the short-term.