Gold prices dropped to a three-week low on Thursday, as the dollar continued to appreciate after the Federal Reserve's Wednesday decision to raise interest rates.
Gold for August delivery settled down 1.7% at $1,254.60 a troy ounce on the Comex division of the New York Mercantile Exchange, closing at the lowest level since May 24 in the biggest one-day drop since December.
The WSJ Dollar Index was recently up 0.6% at 88.63, making dollar-denominated metals more expensive to other currency holders.
On Wednesday, the Federal Reserve announced its decision to raise interest rates by 25 basis points to between 1% and 1.25%. Gold pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
The central bank also indicated plans to raise interest rates one more time in 2017, further weighing on gold prices. The decision to raise rates "quelled the notion that the recent weakness in consumer price inflation will deter policy makers," according to Fitch Group's Business Monitor International in its morning note.
Meanwhile, copper for July delivery fell 0.3% to $2.5655 a pound in New York.
"We've had data out of China over the past week that suggests stability. You see that base metals are really sort of trading sideways...lacking any real inspiration," said Tai Wong, head of metals trading at BMO Capital Markets.
Stephanie Yang contributed to this article
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
June 15, 2017 15:16 ET (19:16 GMT)