MTECHTIPS:-Gold tumbles to 10-month lows on Federal Reserve rate hike

MTECHTIPS:-Gold tumbles to 10-month lows on Federal Reserve rate hike

MTECHTIPS- Gold prices tumbled to 10-month lows on Thursday after the Federal Reserve hiked interest rates and signaled it expects to raise rates more quickly than previously anticipated in 2017. Gold was trading at $1,132.05 a troy ounce by 10:40 GMT, down 2.63% at the weakest level since February 2. Wednesday’s rate was largely priced in by markets, but the dollar surged after the U.S. central bank predicted it would raise interest rates three times in 2017, up from the two hikes predicted in September. “Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made” and that it is expected to make, Fed Chair Janet Yellen said. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.62% at 102.66, the most since January 2003. Higher rates typically boost the dollar by making dollar assets more attractive to yield-seeking investors. Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise

WWW.MTECHTIPS.COM

07489294118-119