Gold prices decline after US federal's decision to raise interest rate

On Wednesday, gold prices dropped after the U.S. Federal Reserve’s decision to hike interest rates by 50 basis points.

Spot gold was last down 0.30% to $1,80489 per ounce. U.S. gold futures fell 0.50% to $1,816.30

Gold prices had jumped over the key $1,800 per ounce level in the previous session to their highest in more than five months after data showed a smaller-than-expected rise in U.S. consumer prices.

Lower rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion.

“The market is more focused on the end game or the idea that the Fed will be ending its interest rate hike cycle early in 2023. That continues to be the main focus of many of these asset classes, including gold,” High Ridge Futures’ Meger said.