Gold prices declined in European trade for another session, almost hitting 29-month lows and on track for the second weekly loss in a row as global central banks continue to tighten their monetary policies and hike interest rates, hurting demand on non-yielding assets such as gold. 

US 10-year treasury yields surged to 12-year highs after the Federal Reserve raised rates by 75 basis points to 3.25%, the highest since 2008.

Prices Today

Gold prices fell 0.4% to $1,665 an ounce, after losing 0.2% yesterday, hovering near 29-month lows at $1,653.

Gold is down 0.6% so far this week and on track for the second weekly loss in a row on higher interest rates. 

Global Central Banks

As expected the Federal Reserve hiked interest rates by 75 basis points for the third meeting in a row to 3.25%, the highest since 2008.

The Fed intends to maintain its bullish stance against inflation, raising rates to 4.5% by the end of the year, which means we have 125 basis points of rate hikes in the last two meetings of the yer.

The Fed is aiming for the neutral 4.75% level for interest rates, which means raising rates by just 25 basis points in 2023.

Jerome Powell

Fed Chair Jerome Powell said his message hasn't change since Jackson Hall, with the Federal Open Market Committee aiming to cut inflation 2% through aggressive policy tightening until it's done.

Swiss National Bank

Swiss National Bank decided at its September 22 policy meeting to increase interest rates by 75 basis points to 0.5%, returning to positive ground for the first time since 2011, matching analysts expectations, and it's the first such hike since 2007.

Otherwise, Bank of England also voted to increase interest rates this week by 50 basis points to 2.25%, the highest since 2008.

US Yields

US 10-year treasury yields rose 0.5% on Friday to 12-year highs at 3.738%, and potentially are heading for 4%. 

The SPDR 

Gold holdings at the SPDR Gold Trust fell 2.03 tones yesterday, the fifth such decline in a row to a total of 950.13 tones, the lowest since March 2020.

Euro fell in European trade to 20-year lows against dollar for the fourth straight session, heading for the second weekly loss in a row ahead of major European data. 

The dollar rose to two-decade highs after US 10-year treasury yields rallied as well, with the Federal Reserve hiking interest rates to 2008 highs. 

EUR/USD fell 0.7% to 0.9770, the lowest since October 2002, after falling 0.1% yesterday, the third loss in a row, as investors shift focus to the greenback. 

Euro is down 2.3% so far this week against dollar, almost marking the second weekly loss in a row following steps taken by the Fed to control inflation. 

Data

Investors await major data about European sectors, including data on manufacturing and services for September. 

Such data will offer clues on the health of the economy in the third quarter of the year, and might pave the way for even more aggressive policy tightening by the ECB. 

The Dollar

The dollar index rallied 0.5% on Friday, marking 20-year highs at 111.83 and resuming the gains against a basket of major rivals. 

US 10-year treasury yields rose 0.5% today to 12-year highs at 3.738% after the Federal Reserve decided to hike interest rates by 75 basis points this week to 3.25%.

The world's largest central bank asserted its plans to continue to tighten policies and increase interest rates until March 2023 to rein in inflation.

Gold prices rose on Thursday even as the dollar gained ground against major rivals, with haven demand boosting gold amid uncertainty and concerns about global monetary policies. 

As expected the Federal Reserve hiked interest rates by 75 basis points for the third meeting in a row to 3.25%, the highest since 2008.

The Fed also expects US GDP growth to slow down to just 0.2% this year, down from 1.7% in previous forecasts. 

The Fed also expects unemployment to rise to 4.4% by 2023, up from 3.7% currently. 

Separately,  Bank of England hiked interest rates by 50 basis points today, while other central banks in the Arab Gulf region, Switzerland, Philippines, and others, took similar measures. 

Earlier US data showed unemployment claims rose to 213 thousand last week, beating estimates of 218 thousand.

The dollar index rose 0.5% as of 16:57 GMT to 111.2, with a session-high at 111.8, and a low at 110.4. 

Gold spot prices rose 0.4% as of 16:58 GMT to $1,682 an ounce. 

US unemployment claims fell to 213 thousand in the week ending September 17, beating estimates of 220 thousand, and down from 215 thousand in the previous reading.