Gold futures fell to their lowest close in about one-and-a-half months on Thursday as the dollar climbed higher after the Fed forecast rate hikes by 2023.

The dollar index rose to a two-month high at 92.01 a little past noon, and despite paring some gains subsequently, was still fairly high up at 91.83, gaining 0.77% from Wednesday’s close.

Meanwhile, the yield on U.S. 2-year Treasury Note rose to 0.213%, the highest level in a year.

The Federal Reserve’s projection that interest rate will see a couple of hikes by 2023 pushed up the dollar. Seven officials penciled in a first hike as early as 2022.

The central bank raised its projections for inflation and economic growth and took initial steps to wind down the bond purchase program.

In his post-meeting press conference, Fed Chair Jerome Powell said reaching the standard of “substantial further progress” is still “a ways off” and stressed the central bank would provide “advance notice” before making any changes to its asset purchases.

Gold futures for August ended down by $86.60 or about 4.7% at $1,774.80 an ounce, suffering their biggest one-day drop in percentage terms this year.

Silver futures for July closed lower by $1.956 or about 7% at $25.856 an ounce, while Copper futures for July settled at $4.1780 per pound, down $0.2070 or 4.7% from the previous close.

In economic news today, the Labor Department said initial jobless claims rose to 412,000 in the week ended June 12th, an increase of 37,000 from the previous week’s revised level of 375,000.

The increase surprised economists, who had expected jobless claims to edge down to 359,000 from the 376,000 originally reported for the previous week.

Jobless claims had declined in eight out of the nine previous weeks, falling to their lowest levels since March of 2020.

A separate report from the Federal Reserve Bank of Philadelphia showed Philadelphia-area manufacturing activity expanded at a slightly slower rate in the month of June.

Meanwhile, the Conference Board released a separate report showing another significant increase by its index of leading U.S. economic indicators.

The material has been provided by InstaForex Company – www.instaforex.com

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