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Gold Falls Below $1,200 After Fed Hikes Interest Rates

September 26, 2018 at 21:31 by Vladimir Vyun

Gold fell today, breaking the psychologically important $1,200 level, and other metals followed after the Federal Reserve hiked interest rates. The Fed increased its federal funds rate by 25 basis points to 2%-2.25% as was widely expected. Furthermore, the central bank’s projections showed that policy makers plan one more hike this year.

The news boosted the US dollar, and that usually hurts metals priced in the US currency. Additionally, higher borrowing costs increase cost of holding non-yield bearing assets.

Futures for delivery of gold in December dropped 0.55% to $1,198.5 per troy ounce as of 21:17 GMT on COMEX today. Silver tumbled as much as 0.95% to $14.36 per ounce. Copper fell 0.19% to $2.818 per pound. Spot prices for platinum and palladium were little changed at $822.87 per ounce and $1,068.4 per ounce respectively.

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