Gold prices continued to decline after the Federal Reserve announced its decision, having previously hit a more than one-month low.

Topic: Federal Reserve Announces No Change in Interest Rates; Financial Institutions Expect Only One Rate Cut This Year

Gold prices continued to decline on Wednesday following the Federal Reserve’s announcement of its latest policy decision. The price of gold previously hit a one-month low, influenced by a stronger dollar and expectations that interest rates may remain high for a longer period amid the backdrop of the Middle East conflict.

Spot gold fell 2.9%, trading at $4860.21 per ounce, earlier hitting its lowest level since February 6. U.S. gold futures for April delivery closed down 2.2%, with a settlement price of $4896.20.

The stronger dollar has raised the cost for investors holding other currencies to purchase gold.

The Federal Reserve, as widely anticipated by the market, kept interest rates unchanged, stating that inflation levels remain high and did not indicate when it might lower short-term borrowing costs again. Officials’ economic forecasts suggest they expect to cut rates once more this year.

Meanwhile, Federal Reserve Chairman Jerome Powell noted that the uncertainty brought about by the Iranian conflict makes this round of predictions somewhat tentative.

Independent precious metals trader Tai Wong stated, “Powell strongly hinted that the Fed is taking a wait-and-see approach, and his mild dovish signals are far from sufficient to boost assets or gold—the latter’s recent trading behavior resembles that of a risk asset. If the market expects a Fed ready to ‘lend a hand’ at any moment—they did not get that.”

“Gold breaking below $5000 per ounce may be technically concerning, but it will not affect the long-term bullish trend.”

At the same time, a report from the U.S. Department of Labor showed that U.S. producer prices in February rose more than expected, and due to the war, the increases could widen further.

The Iranian conflict has continued for nearly three weeks, with few signs of easing, causing benchmark Brent crude oil futures to remain above $100 per barrel.

On Wednesday, Iran’s massive Pars gas field was attacked, marking a significant escalation in the situation and prompting Tehran to announce retaliation against oil and gas targets across the Gulf region.

Spot silver fell 4.2% to $75.99, platinum dropped 3.9% to $2041.30, and palladium declined 6.1% to $1503.97.

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Editor: Li Tong