Gold down on dollar rally

Posted By: Religare
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Gold futures closed lower in the international market on Thursday as the first U.S. interest-rate hike in a year and the prospect of a more-aggressive Federal Reserve weighed on precious metals.

Gold down on dollar rally
The knee-jerk drop in gold "was a response to the statement suggesting the Fed could raise rates perhaps three times in 2017, rather than to yesterday's hike.

Higher interest rates typically make the dollar stronger, which can put pressure on commodities that are pegged to the currency, such as gold. In addition, noninterest-paying assets like gold lose their luster as interest rates increase.

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