MTECHTIPS;-Gold price dips on Fed interest rate decision

MTECHTIPS;-Gold price dips on Fed interest rate decision

MTECHTIPS- The price of gold settled lower on Wednesday, at $1143.90, as the Federal Reserve hiked interest rates. The price of the commodity was down 1.54% at 3:54 p.m. Eastern today. By the end of the day, the precious metal had declined by $19.79, or 1.70%. Gold is seen as a hedge against inflation historically. Janet Yellen, the Fed chairwoman, announced today that the central bank was raising interest rates by 0.25%, and that it planned three additional rate hikes next year. The second part of that announcement was unexpected, and took the market by surprise. Yellen described the move as a “very modest adjustment.” But Wall Street didn’t seem to see it that way, with the Dow Jones Industrial Average soaring and then retreating on the news and the price of gold dropping to $1144.10 per troy ounce, losing nearly $15 per ounce, on trading today. Yellen said by providing guidance that the Fed was planning three interest rate increases next year, she was trying to incorporate that kind of thinking into the attitudes of market traders, so they would not act with surprise, and roil markets, when the monetary policy events occur as planned next year.

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