U.S. gold dropped to a 5-week low Wednesday as the dollar gained against the euro
U.S. gold dropped to a 5-week low Wednesday as the dollar gained against the euro a day after the US Federal Reserve raised interest rates and warned about rising inflation.
"The funds were big sellers this morning, following the Fed's move yesterday. They shoved it below $425, but there was some option-related buying at the low. We're seeing a short-covering bounce," said one floor trader.
April delivery gold dropped $5.10 weaker at $426.50 an ounce at early trade on the New York Mercantile Exchange's COMEX division.
On Tuesday, the Fed raised its benchmark rate a quarter percentage point to 2.75 percent, its seventh straight increase since last June, saying inflation pressures had picked up and price stability would only be balanced with appropriate policy action.