Investing.com - Gold prices extended sharp losses from the previous session on Thursday, after Federal Reserve Chair Janet Yellen suggested interest rate hikes could happen sooner than expected.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery fell to a session low of $1,326.10 a troy ounce, the weakest level since February 28.
Gold last traded at $1,331.80 an ounce during European morning hours, down 0.71%, or $9.50. Prices lost 1.3%, or $17.70, on Wednesday to settle at $1,341.30.
Futures were likely to find support at $1,320.10 a troy ounce, the low from February 28 and resistance at $1,360.20, the high from March 19.
Meanwhile, silver for May delivery dropped 1.05%, or 21.8 cents, to trade at $20.59 a troy ounce. Silver ended Wednesday’s session down 0.17%, or 3.6 cents, to settle at $20.82 an ounce.
Gold sold off on Wednesday after the Fed said that it would reduce its monthly bond buying program by an additional $10 billion to a total of $55 billion a month, in a widely anticipated decision.
Equities sold off and the dollar rallied after Fed Chair Janet Yellen indicated that the central bank could begin to raise interest rates about six months after the bond-buying program winds up, which is expected to happen this fall.
The central bank also updated its forward guidance, discarding the 6.5% unemployment threshold for considering when to increase borrowing costs and said it will look at a wide range of information.
Rising interest rates historically have been a negative for gold, which can not compete with the higher interest rates offered by other assets.
Market players looked ahead to key U.S. data later in the day to further gauge the strength of the economy. The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.
Elsewhere on the Comex, copper futures for May delivery lost 1.33%, or 4.0 cents, to trade at $2.947 a pound, as investors remained concerned over the health of China’s economy.
The industrial metal fell to $2.877 a pound on March 19, the lowest since July 2010, amid growing anxiety over domestic bond defaults in the Chinese property sector.
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