Gold Drops as USD Surges Following Fed’s Change in Tone

Gold prices declined on Thursday and registered their largest drop in about seven months due to the strong surge by the U.S. Dollar (USD).

The yellow metal futures for June delivery lost $85.70, or 4.61%, to close at $1,773.80 per ounce, its lowest closing level for gold’s most active contract since April 30.

This marked the biggest daily loss for gold since November 9, 2020.

The USD is rising against most major currencies, after the Federal Reserve signaled a surprise change in tone, expecting raising interest rates earlier than previously expected, with two rate hikes now forecasted in 2023.