• Gold price continues to lose after the Fed interest rate decision.
• Fed kept its current benchmark policy rates at 5.5%.
• Precious metal is under pressure on the Fed’s projection of an additional rate hike in 2023.

Gold price extends losses on the third consecutive day, trading lower around $1,925 during the early trading hours of the Asian session on Thursday. As expected, the US Federal Reserve (Fed) maintained current benchmark policy rates at 5.5% in the meeting held on Wednesday.

The price of precious metal is facing downward pressure as the Fed projects an additional rate hike in 2023. Furthermore, the Federal Open Market Committee (FOMC) has disclosed in its monetary policy statement, anticipating slightly higher inflation than its previous forecasts.

Although the monetary policy statement remained largely consistent with the previous decision, the unexpected surge in the value of the US Dollar (USD) was primarily driven by the Fed officials' decision to revise their projected interest rates for 2024, elevating them from 4.6% to 5.1%. This adjustment played a pivotal role in the rapid appreciation of the Greenback.

US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against the six other major currencies, continues to gain and trades around a six-month high level at 105.60 at the time of writing.

US Treasury yields rose, with the 10-year rising to 4.43% by the press time, the highest since 2007, boosting the Greenback.

The precious metal slipped after Fed Chair Jerome Powell’s press conference to outline the Fed's position. Powell reaffirmed the Fed's commitment to reaching its long-term inflation target of 2%.

While he acknowledged that the Fed is likely approaching the peak of its interest rate hike cycle, he emphasized that the Fed will continue to make its future decisions based on data-driven analysis.

The impact of the Fed meeting will continue on Thursday when more US data is due with the weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, and Existing Home Sales Change.