The dollar index rallied to a 13-month high and gold prices tumbled after the Federal Reserve's hawkish policy update. The dollar index rose 0.54%, supported by the FOMC's projection of higher interest rates later this year, a larger-than-expected rise in the Philadelphia Fed business outlook survey to 10.3, and weekly jobless claims falling to 226,000. August COMEX gold dropped $118.40, or 2.70%, and July silver fell $3.872, or 5.47%, pressured by the stronger dollar and reduced safe-haven demand after President Trump signed a preliminary deal to end the Middle East war. A 2% decline in WTI crude oil to a 3.5-month low limited dollar gains and provided some support to precious metals by lowering inflation expectations.
Fed's hawkish policy update and higher interest rate projections strengthen the dollar, pressuring gold prices.
Stronger dollar and reduced safe-haven demand after Middle East peace deal drive silver lower.
WTI crude falls 2% to 3.5-month low, partly due to stronger dollar and lower inflation expectations.