Gold collapses on Fed's more hawkish outlook

GOLD is set to close the week on a sombre note below US$1,800 an ounce after prices tumbled, selling off sharply to a six-week low after a hawkish US Federal Reserve statement indicated a moderate change of script and sentiment.

The precious metal tanked as the dollar and Treasury yields soared when the Fed signalled that it may begin dialling back stimulus programmes that have fuelled the US recovery from the pandemic, while also releasing forecasts that show that it anticipates two interest-rate increases by end-2023. Still, Fed chair Jerome Powell stuck with his long-standing view that spikes in inflation would have only a temporary impact.

European central bankers meanwhile maintained that it may be too soon to start discussing shifting away from current ultra-loose monetary policy.