Gold tumbled to its lowest in 8-1/2 months on Thursday as the dollar index jumped to a four-year peak after the Federal Reserve signaled that a faster hike in U.S. interest rates might be on the horizon.
The Fed on Wednesday renewed its pledge to keep interest rates near zero for a “considerable time”, but also indicated it could raise borrowing costs faster than expected when it starts moving.
“The shift higher in the anticipated Fed funds rate for the end of 2015 and 2016 could further weigh on gold prices longer term and act as a headwind to future rallies,” HSBC analysts said in a note.
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