Gold is being battered in the fallout of Wednesday’s Federal Reserve rate hike. The yellow metal has tumbled more than 3% as traders flee gold and head into
February gold futures fell $36.60, or 3.15%, to $1,127.10 per ounce at 16:39 GMT on Thursday. This is the biggest
Silver is not performing any better. February silver futures plummeted $1.24, or 7.21%, to $15.98 an ounce and are trading at
The US central bank announced on Wednesday that the Federal Open Market Committee (FOMC) voted unanimously to raise interest rates for just the second time in a decade. Policymakers said that it will raise rates three times next year, two to three times in 2018, and three times in 2019.
Fed Chair Janet Yellen and the Board of Governors agreed to increase the target range from a range of 0.25% to 0.5% to a range of 0.5% to 0.75%. Also, the discount rate was boosted from 1% to 1.25%. The overnight funds rate remained unchanged at 0.41%.
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency
mortgage-backed securities in agencymortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings oflonger-term securities at sizable levels, should help maintain accommodative financial conditions.
This helped push up the US dollar to a 13-year high.
Gold is in for a rough ride as it is sensitive to rising rates and a stronger greenback. In a
If you have any questions and comments on the commodities today, use the form below to reply.