(Bloomberg) — Gold extended declines after Federal Reserve officials shifted to an earlier end of their asset-buying program and signaled they favor raising interest rates in 2022 at a faster pace than economists were expecting.
Heralding one of the most hawkish policy pivots in years, the central bank said Wednesday it will double the pace at which it’s scaling back purchases of Treasuries and mortgage-backed securities to $30 billion a month, putting it on track to conclude the program in early 2022, rather than mid-year as initially planned.
“Today we have seen the aggressive side of the Fed,” said Naeem Aslam, chief market analyst at Ava Trade. “They used all bullets and came with all guns blazing. Hence, we have seen the gold price falling off the cliff, and the dollar index gained more strength.”
Spot gold fell as much as 1% to $1,753.66 an ounce and was trading at $1,765.22 at 2:12 p.m. in New York.
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