Gold and Silver Plunge As Yellen Hands The US Dollar A Lifeline
New York (Mar 20) Gold suffered its biggest daily percentage loss since December on the back of a hawkish tone from Federal Reserve officials at their March meeting, which drove demand for the US Dollar.
Gold and silver sank following the conclusion of the Federal Reserve March meeting where a further $10bn in stimulus cuts was announced that was married with a hawkish tone from the central bank.The pursuant press conference with Fed Chair Janet Yellen and the release of new economic projections offered further fodder for traders and fuelled declines for the precious metals.
Dr. Yellen suggested the Fed would continue winding back its asset purchase program in measured steps at future meetings supported by gradual improvements in the labour market, which would see the end of quantitative easing later this year. Additionally, a critical takeaway from the press conference was the suggestion that a rate hike may occur within 6 months of ending the record stimulus program. The firmer commitment from the central bank towards monetary policy normalisation drove traders back to the US Dollar, which in turn weighed on gold and silver prices.