Gold Prices Plummet as Fed Raises Interest Rates
Gold prices plummeted over 1% on Wednesday after the US Federal Reserve raised interest rates, signaling further increases in borrowing costs. The Fed hiked the benchmark overnight interest rate by a quarter of a percentage point to the 3.75%-4.00% range.
The move sent the US dollar higher against the euro, making gold more expensive for overseas buyers. Spot gold fell 1.2% to $4,240.1 per ounce as of 3:10 p.m. ET (1910 GMT), while U.S. gold futures for December delivery settled 1.3% higher at $4,387.50.
Chief Kevin Warsh echoed the official statement by promising the Fed's policy committee would 'deliver price stability.' However, his comments were seen as hawkish, reinforcing the view that there will be additional hikes in upcoming meetings, which is pressuring metals in the short-term.