The dollar index rallied to a new two-decade high, making the greenback-priced metal more expensive for buyers holding other currencies.
Gold is seen as a hedge against inflation but rate hikes to tame inflation tend to raise the opportunity cost of holding zero-yield bullion. Spot silver slumped 1.7% to $19.26 per ounce while platinum fell 1.1% to $897.92.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said: “COMEX gold trades modestly lower near $1668/oz weighed down by firmness in the US dollar post Fed decision. The US dollar index jumped to fresh 2002 high as the US central bank projected possibility of another 0.75% hike this year and no cut in interest rate until 2024. The US dollar is also supported by safe haven buying and no major change in monetary policy stance of other central banks. The persistent strength in the US dollar may continue to weigh on gold. However, Fed’s move was well expected so market reaction may subside."
Despite the recent slide in gold prices, investors refused to jump in. Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.12% to 952.16 tonnes on Wednesday from 953.32 tonnes on Tuesday.
Gold Price - Technical Outlook
“Gold has support at $1647-1640, while resistance is at $1670-1782. Silver has support at $19.05-18.85, while resistance is at $19.42-19.55. In rupee terms gold has support at ₹49,040-48880, while resistance is at Rs49,610, 49,760. Silver has support at Rs56,250-55,640, while resistance is at Rs57,680–58,110," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.