Gold on track for weekly losses on Fed's decisions

Gold prices fell in European trade on track for a weekly loss on the Fed's historic decisions this week, and as global banks continue to hike rates to control runaway inflation. 

Gold prices fell 0.8% to $1,841 an ounce, after rising 1.25% yesterday, the second profit in a row off four-week lows at $1,805 an ounce. 

Gold is down 1.7% so far this week on track for the second weekly loss in the last three weeks, and the largest since May. 

The Fed 

In a historic decision, the Federal Reserve decided to increase interest rates by 75 basis points to 1.75%, the fastest such increase since 1994.

The historic decision comes as the bank asserts its commitment to fight off inflation rates, which hit 1981 highs, while boosting dollar's standing.

Global Central Bank

Global central banks are still moving to control inflation and prices, with Bank of England hiking rates by 25 basis points to 1.25%, the fifth such increase in a row.

Swiss Central Bank decided to hike rates by 50 basis points at the June 16 meeting to minus 0.25%, the first such increase since 2007, while analysts expected no change at minus 0.75%.

Higher interest rates weaken demand on gold prices as it becomes less attractive as an investment.

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday for another session at 1,063 tones, the highest since May 20.