Gold prices fell on Thursday, sharpening losses for the fifth straight session and plumbing three-month lows on bullish expectations from the Fed. 

The Federal Reserve raised the outlook of interest rates this year from 5.25% to 5.75%, indicating another 0.5% worth of rate hikes at upcoming meetings.

Gold Prices Today

Gold prices fell 0.7% to $1,929.05 an ounce, the lowest since March 17, with a session-high at $1,945, after losing 0.1% on Wednesday, the fourth loss in a row following the Fed's meeting. 

The Fed

The Federal Reserve maintained interest rates unchanged between 5% and 5.25% as expected, the highest since August 2008.

Such a transient pause in  policy tightening comes after ten consecutive meetings of interest rate hikes to combat record US inflation.

The Fed said it'll continue to monitor data and economic developments in order to modify policies accordingly. 

Economic Forecasts

The Federal Reserve released the quarterly economic outlook with major modifications: 

The Fed now expects US growth this year at 1%, up from 0.4% in March forecasts, which expecting 2024 growth at 1.1%, down from 1.2%, and growth in 2025 at 1.8%, down from 1.9%.

As for inflation, the Fed revised its estimates for inflation this year to 3.2% from 3.3% in previous forecasts, and 2024 inflation to 2.5%, and 2025 inflation at 2.15.

As core core inflation, the Fed revised outlook for 2023 core inflation to 3.9% from 3.6%, while maintaining 2024 outlook at 2.6%, and revised 2025 core inflation outlook to 2.2% from 2.1%. 

As for interest rates, the Fed revised its targets this year to 5.75%% from 5.25%, and 2024 targets to 4.75% from 4.25%, and 2025 targets to 3.5% from 3.25%.

Powell

Fed Chair Jerome Powell said that maintaining interest rates unchanged comes as the Committee continues to monitor economic conditions and data for the time being.

Powell said it might be useful to turn to rate hikes once more later this year, but moderately to contain inflation further.

US Rates

Current pricing for a 0.25% Fed rate at the July meeting now rose from 60% to 72%. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 1.74 tones yesterday to a total of 929.70 tones, the lowest since May 2. 

Oil prices fell on Wednesday following US inventory data, which showed a huge buildup last week, and following the Federal Reserve's policy decisions today. 

The Fed maintained interest rates unchanged but expected borrowing costs to  grow by another half a percentage point by the end of the year as the economy strengthens and inflation slows down.

Both US crude and Brent rose over 1.5% earlier in the session, and added over 3% in the previous session, amid expectations of improving fuel demand after China's central bank cut down short-term borrowing costs. 

The Energy Information Administration reported a surge of 7.9 million barrels in US crude stocks last week to 467.1 million barrels, while analysts expected a drop of 1.3 million barrels.

Distillate stocks rose 2.1 million barrels to 113.9 million barrels, while gasoline stocks rose 2.1 million barrels to 220.9 million barrels.

On trading, Brent August futures fell $1.09, or 1.5% to $73.20 a barrel.

US crude futures due in July declined 1.7%, or $1.15 to $68.27 a barrel. 

The Federal Reserve held interest rates unchanged between 5% and 5.25% as expected by most analysts at today's policy meeting. 

The Energy Information Administration reported a surge of 7.9 million barrels in US crude stocks last week to 467.1 million barrels, while analysts expected a drop of 1.3 million barrels. 

Distillate stocks rose 2.1 million barrels to 113.9 million barrels, while gasoline stocks rose 2.1 million barrels to 220.9 million barrels.