Prices drop ahead of Fed news
Bullion prices ended lower aat Comex on Wednesday, 17 June 2015. Gold futures settled lower after the Federal Reserve moved closer to its first interest-rate increase in almost decade, but also indicated that the pace of the increases may be slower. The Federal Reserve held rates steady on Wednesday, while signaling as many two rate hikes before the end of the year.
Gold for August delivery fell $4.10, or 0.4%, to settle at $1,176.80 an ounce on Comex, ahead of the Fed news.
July silver shed 1.8 cents, or 0.1%, to settle at $15.947 an ounce for the regular session, before the Fed news.
Commodities have been under pressure due to recent rate-hike expectations, as higher interest rates increase the cost of storing commodities, and make it less attractive for investors seeking better returns across assets.
The Fed said it still expects its benchmark fed funds interest rate to rise to 3.75% in the longer run, but the central bank also indicated that the pace of rate hikes will be slower.
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During the news conference, Fed Chairwoman Janet Yellen said the bank will be extremely patient in raising interest rates over the next 2 years.
However, the U.S. dollar index did weaken following the FOMC statement, which gave the gold and silver markets a mild boost.
European stock markets were lower again on Wednesday amid worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. The European Central Bank on Wednesday authorized more emergency loan money to Greece. Greece-EU debt negotiations broke down on Sunday.
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