COMEX gold declined 0.94% to $4,340.40 per ounce, down $41 an ounce from the previous session. The metal traded between $4,273.30 and $4,348.90 an ounce during the session.
COMEX silver fell 1.74% to $69.535 per ounce, losing $1.232 anounce. The white metal touched an intraday high of $69.920 an ounce and a low of $67.920 an ounce.
The weakness in precious metals followed the Federal Reserve’s decision to keep the benchmark federal funds rate unchanged at 3.5%-3.75% for the fourth consecutive meeting. The Federal Open Market Committee (FOMC) unanimously voted to maintain rates, marking the first unanimous policy decision since June last year and the first policy meeting under new Fed Chair Kevin Warsh.
While the decision itself was widely expected, investors focused on the Fed’s updated projections, which indicated growing divergence among policymakers over the future direction of interest rates.
Some officials now see the possibility of a rate increase before any further policy easing, stressing lingering concerns about inflation.
Higher-for-longer interest rate expectations typically weigh on non-yielding assets such as gold and silver by increasing the opportunity cost of holding precious metals.
The bullion market also contended with a firmer US dollar and elevated Treasury yields, as traders adjusted positions following the Fed’s guidance. At the same time, lingering geopolitical uncertainties in the West Asia helped limit deeper losses, with investors continuing to monitor developments around the US-Iran ceasefire arrangement.
Analysts said bullion prices are likely to remain sensitive to incoming economic data and further commentary from Federal Reserve officials, as markets seek clarity on whether the next policy move will be a rate hike or eventual easing.
-With agencies inputs
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