Gold futures drop sharply after Fed rates hike hint

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This article was posted on Thursday, 07:07, UTC.

The BOJ is also seen maintaining a loose pledge to keep buying bonds so its holdings increase at an annual pace of 80 trillion yen ($710.86 billion), in contrast to the Fed's plan to steadily pull back from crisis-era measures.

Asian stocks ended mostly lower on Thursday and the dollar strengthened after the US Federal Reserve struck a somewhat hawkish tone by signalling another rate hike this year. Don't have an account?

While the Nasdaq edged down 5.28 points or 0.1 percent to 6,456.04, the Dow rose 41.79 points or 0.2 percent to 22,412.59 and the S&P 500 inched up 1.59 points or 0.1 percent to 2,508.24.

In South Korea, the KOSPI index slipped 0.08 percent to 2,410.21.

Elsewhere on the Comex, silver futures lost 1.78% to $17.03 a troy ounce.

Among emerging market currencies, the Mexican peso recovered from Tuesday's losses spurred by the second deadly earthquake to strike the country in two weeks.

With the Fed due to release its latest policy statement at 2 p.m. ET (1800 GMT), caution prevailed.

"It's sort of interesting when you think about how hawkish the Fed was yesterday". New economic projections released after the Fed's two-day policy meeting showed 11 of 16 officials see the "appropriate" level for the federal fund's rate, the central bank's benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017.

Today, markets are turning to Japan for potential changes in its monetary policy. Market expectation is that the BOJ will leave the rates unchanged given the low inflation rate. In the bond market, benchmark 10-year notes were last up in 3/32 price to yield 2.232 percent, from 2.243 percent on Tuesday. A rising dollar also tends to hurt the value of gold. The USD/JPY rate was at 112.46.

The dollar was 0.4 per cent higher at 112.640 yen, its highest since July 18.

-The Bloomberg Dollar Spot index surged 0.5 percent.

Brent Crude was flat at $55.37 per barrel.

-Campaigning continues in Germany, days before the Sept. 24 election.

Take away: Though still lagging Apple and Samsung in global sales, Huawei is rising fast.

The main trend for the greenback is lower.

In India, a new report found that there is a "time bomb" in the country's widely-cheered demographic dividend. "Janet Yellen has a press conference, and that and the statement will perhaps provide some insight into what they're going to do in terms of deleveraging their balance sheet", said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. Safe havens will also come under further pressure if U.S. yields manage to recover further and given no geopolitical surprises. The Indian economy has already showed lackluster growth in the first of this year.

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