Gold trades lower; Fed rates unchanged
Gold prices dipped to their lowest level in over three weeks on Thursday as a stronger US dollar and the increasing likelihood of another US Federal Reserve interest rate hike in the current year curbed demand for the safe haven asset.
Spot gold was down 0.2% at USD 1,298.61 an ounce at 0054 GMT, after earlier dropping to lowest since late August at USD 1295.65. US gold futures for December delivery lost 1% to USD 1,302.10 an ounce.
The US dollar increased while Asian shares slipped slightly on Thursday after the Fed announced a plan to start shrinking its balance sheet and signalled one more rate hike later this year.
The US central bank left interest rates unchanged on Wednesday but signalled it still expects one more increase by the end of the year despite a recent bout of low inflation.
The Bank of Japan is expected to reassure markets on Thursday that it will lag well behind its US counterpart in scaling back its massive stimulus, as the improving Japanese economy is yet to boost inflation to its elusive 2% target.