US Gold dropped $3 Tuesday on the Comex division of the New York Mercantile Exchange
US Gold dropped $3 Tuesday on the Comex division of the New York Mercantile Exchange as U.S. Federal Open Market Committee raised its target for the federal funds rate by 25 basis points to2.25%.
The most-active February contract tumbled $3 to $437.30 per ounce.
February futures gained $5 Monday on short covering and light fund buying as players adjusted positions ahead of the FOMC meeting.
That source of buying dried up Tuesday, however, and the market's focus
returned to the movement and tone of the U.S. currency through the day. With the greenback able to shrug off news of a widening in the U.S. goods and services trade balance Tuesday ahead of the rate decision, dollar alternatives such as gold came under pressure.
Dealers agreed that more price slippage may be seen overnight should the U.S. currency receive a boost from the rate news and accompanying statement on the U.S. economy.