Los Angeles CA, September 21 (Tangible Investments) — by James O’Dell — Precious metals prices were lower on Thursday as Gold dips in wake of hawkish Fed meeting. Gold is down 0.72 percent to $1,291.20 an ounce after sliding $10.70 on Wednesday to close at $1,300.50 an ounce.

Silver is down 1.28 percent to $16.91 an ounce after easing $0.11 on Wednesday to close at $17.13 an ounce. The Gold/Silver ratio rose to 75.92. Platinum is down 0.85 percent to $934.00 an ounce. Palladium is down 0.11 percent to $908.00 an ounce.

Gold is sharply lower in early trading Thursday after the rather hawkish monetary policy announcement from the FOMC on Wednesday. Policymakers are set to hike interest rates another quarter point in December this year. Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents for September show year-end rate hike to 1.50-percent.

Meanwhile, The Fed will begin in October gradually unwinding $10 billion each month of its massive $4.5 trillion balance sheet. The Fed will then up the total another $10 billion each quarter until it is unwinding $50 billion each month.

“It should be an interesting time in the run up to mid-December as we see the Fed prepare to raise rates, reduce the balance sheet at the same time as a tense negotiation over the (U.S.) debt ceiling, plus fiscal spending plans and tax cuts are debated in Congress,” said Mitsubishi’s Jonathan Butler.

Possibly One More Rate Hike This Year

Thursday morning Federal funds futures set the probability of a December rate hike at more than 60 percent. Last week it was set at under 40 percent.

“In the bigger picture” for Gold prices, said Jeffrey Halley, of OANDA, “I still see the price action as corrective. It should base in this $1280-$1296 region. I see global uncertainty, diversification as continuing to underpin Gold for now.”

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