Gold slumps to lowest since mid-March

Gold prices nursed overnight losses in North American trade on Thursday, falling to the lowest level in around six weeks after the Federal Reserve left the door open to raising interest rates in June.

Comex gold futures sank to a session low of $1,232.80 a troy ounce, a level not seen since March 21. It was last at $1,235.50 by 8:00AM ET (12:00GMT), down $13.00, or about 1%. Meanwhile, spot gold was at $1,234.40.

Also on the Comex, silver futures shed 2.9 cents, or about 0.2% to $16.50 a troy ounce, after touching a four-month low of $16.41 a day earlier.

The Federal Reserve left interest rates unchanged on Wednesday, as was widely expected, and gave a positive assessment of the U.S. economy, suggesting it was still on track for two more rate hikes this year.

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The Fed said it expects the economy to rebound after hitting a soft patch in the first three months of the year, noting that the labor market looks solid and inflation is running close to its target, setting the stage for a rate hike next month.

Futures traders are now pricing in around a 71% chance of a hike at the Fed’s June meeting, according to Investing.com’s Fed Rate Monitor Tool, up from about 60% before the Fed statement.

The dollar index, which measures the greenback against a basket of currencies, shot up on the news, rising as high as 99.34. It was last at around the 99.00-level in early New York morning trade.

Meanwhile, 10-year Treasury yields rose close to 2.34% from around 2.30% late Wednesday.

Elsewhere in metals trading, platinum slumped 0.2% to $903.30, while palladium lost 0.2% to $798.35 an ounce.

Copper futures dipped 1.5 cents to $2.528 a pound.

Metal prices extended their biggest daily decline this year on Thursday, amid a firmer dollar and concerns about Chinese demand for commodities like steel and iron.

A Caixin reading on China’s service-sector activity hit its lowest level in nearly a year for April on Thursday, adding to concerns about the country’s economic health.

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