2021.06.1710:32:00UTC+00Gold Slips To Over One-month Low After Fed Rate Talk

Gold fell on Thursday to hover near its lowest level in more than a month, pressured by gains in the U.S. dollar and Treasury yields.

Spot gold fell half a percent to $1,803.09 per ounce, after having touched its lowest since May 6 at $1,799.70. U.S. gold futures were down as much as 3.1 percent at $1,803.45.

The dollar index surged to two-month highs and short-dated U.S. Treasury yields held at one-year highs, after the U.S. Federal Reserve pushed forward its projections for the interest rate hikes and indicated that policymakers had started discussions about scaling back the bond purchase program amid receding risks from coronavirus.

The Fed's projections showed two quarter-point interest rate hikes for 2023, versus none in the March forecasts. Seven officials penciled in a first hike as early as 2022.

The central bank raised its projections for inflation and economic growth and took initial steps to wind down the bond purchase program.

In his post-meeting press conference, Fed Chair Jerome Powell said reaching the standard of "substantial further progress" is still "a ways off" and stressed the central bank would provide "advance notice" before making any changes to its asset purchases.

Brazil's central bank lifted its key interest rate by 75 basis points on Wednesday and signaled another rate hike of the same magnitude at the next meeting.

Policymakers viewed that the rate hike is necessary to mitigate the dissemination of the temporary shocks to inflation.

Earlier today, the Swiss National Bank decided to maintain its expansionary monetary policy in order to ensure price stability and provide support to the economic recovery.

The bank repeated that it is willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration.