Gold futures declined to an eight-month low following the Federal Reserve's decision to increase its outlook for interest rates, reducing the demand for an inflation hedge. As the U.S. economy strengthens, the precious metal is slopping toward its first quarterly drop this year. Despite the news that the central bank is sticking with its promise to keep borrowing costs near zero percent for a "considerable time" following the end of asset purchases, yesterday policy makers forecasted a steeper climb in next year's benchmark rate, reports BusinessWeek.
At the close of the pit session on the Comex division of the New York Mercantile Exchange, the most-active December gold fell $9, or 0.7percent, to $1,226.90 an ounce while Spot metal climbed $3.05 to $1,226.15, according to Forbes.
According to data compiled by Bloomberg, gold's 60-day historical volatility is nearing its lowest level in around four years. Comex future's open interest and options is hovering near the lowest in five years, as money managers trim their bullish holdings for four consecutive weeks.
Meanwhile, December silver traded lower 20.4 cents, or 1.1 percent, to $18.53 an ounce while palladium futures for December delivery dropped 0.9 percent to $831.65 an ounce, reports Forbes.
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