Gold under pressure from historic Fed's decision

Gold prices declined in European trade after a short hiatus from gains on track for four-week lows after the Federal Reserve's historic rates decision.

Many other central banks continue to hike rates to control runaway inflation. 

Gold Prices Today

Gold prices declined 0.7% to $1,819 an ounce, after rising 1.4% yesterday, the first profit in three days, off four-week lows at $1,805. 

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 at 1,063 tones, the highest since May 20.