Investing.com - After the ride to seven-week highs just a fortnight ago, gold longs are now seeing the other end of the spectrum.
The yellow metal booked on Thursday its sharpest one-day loss since late June responding to the Federal Reserve’s return to the path of monetary tightening a day ago with a 25 basis point hike for July, and renewed pledge to stay hawkish to bring inflation to its long-term target of 2%.
Also weighing was the European Central Bank’s own quarter point rate hike on Thursday and signal that it could pause by September — a potentially dovish development that nevertheless pushed the dollar higher versus the euro, adding to gold’s downside.
The front-month August gold contract on New York’s Comex settled at $1945.70 per ounce, down $24.40, or 1.2%, on the day. That was the sharpest one day decline in Comex gold since late May.
Just two weeks ago, Comex gold hit a seven-week high of $1,988.25 — a peak it had not seen since cresting at the $2,000 level in late May.
The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, hovered at $1,943.76 an ounce by 16:00 ET (20:00 GMT), down $28.36, or 1.4%.