Investing.com - Gold prices were under pressure in European trading on Thursday, sliding toward a three-week low after the Federal Reserve hiked rates and maintained plans to go ahead with another increase by year-end.
Comex gold futures were at $1,263.76 a troy ounce by 3:15AM ET (0715GMT), down $12.15, or around 1%. Meanwhile, spot gold was at $1,261.76.
Gold prices touched their lowest since May 26 at $1,259.00 in the prior session.
The Fed raised interest rates for the second time this year at the conclusion of its policy meeting on Wednesday, putting it in a range between 1.0%-1.25%.
The central bank maintained its outlook of three rate hikes total for this year, as it expects that a tightening labor market will lift inflation to the 2% target over the medium term.
The Fed also provided greater details on how it plans to reduce its massive $4.5 trillion balance sheet.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% at 97.00, moving away from the previous session’s seven-month low of 96.31.
Meanwhile, market players continued to monitor political turmoil in the U.S. after the Washington Post reported that President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
Among other precious metals, silver futures dropped 29.8 cents, or about 1.7%, to $16.83 a troy ounce, platinum slumped 1.9% to $933.70, while palladium declined 0.4% to $849.95 an ounce.