(Bloomberg) -- Gold prices dropped after the US Federal Reserve raised the benchmark borrowing rate by 75 basis points, crimping demand for the precious metal that doesn't pay interest or offer returns like assets such as equities.
Spot gold declined 0.2% to $1,662.40 per ounce at 2:02 p.m. in New York. The Fed said it anticipates ongoing rate hikes are appropriate, while the median Fed forecast shows rates at 4.6% in 2023.
Gold is down more than 8% this year as the highest inflation in decades motivated central banks from Europe to the U.S. to hike interest rates at the strongest pace in recent memory. Higher rates reduce the appeal of gold, which isn't an interest-bearing asset.
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