Gold, Silver Tumble Ahead of Fed Rate Decision

Gold and silver futures settled lower on Tuesday ahead of the Federal Reserve's interest-rate decision. The market expects a quarter-point rate increase to the 3.75%-4.0% range, with further tightening signaled.

The continued rally in crude oil prices fueled inflation worries and reinforced expectations that the Fed will raise rates. Benchmark 10-year U.S. Treasury yields rose to their highest level since 2007, and the dollar strengthened, making greenback-priced bullion more expensive for holders of other currencies.

ING analysts noted that 'much of the hawkish Fed risk appears to be priced in.' However, they warned that gold could remain vulnerable if policymakers signal rates will stay higher for longer.