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Gold Extends Drop After Hawkish Powell Wipes Out Year’s Gains

  • Higher real yields pressure the metal, erasing 2022’s increase
  • U.S. economic growth tops estimates, jobless claims fall
Updated on

Gold extended losses -- after falling the most in two months -- as a more hawkish-than-expected U.S. Federal Reserve underscored the central bank’s aggressive approach to tackling inflation.

A stronger dollar on Thursday pressured bullion, which plunged 1.5% Wednesday, as Fed Chair Jerome Powell made clear the U.S. central bank would act as needed to cool the hottest inflation in almost 40 years. That includes a possible interest-rate liftoff in March and more frequent, larger hikes than anticipated. Money markets are now fully pricing in five Fed hikes this year, pushing interest rates to 1.5% by year-end.