Gold prices were down on Thursday as the dollar strengthened amid trade worries.
Comex gold futures for August delivery fell 0.38 to $1,222.90 a troy ounce as of 10:56 AM ET (14:56 GMT). A stronger dollar and rising interest rates have weighed on gold in recent months.
The Fed left interest rates unchanged on Wednesday, as expected. But the central bank upgraded its view on the economy, as strong U.S. economic data support continuing gradual rate hikes.
Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.
The precious metal was also held down by a stronger dollar. Gold falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rallied 0.40% to 94.84.
Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.
Trade uncertainty continued to weigh on investors minds after reports that the White House plans to propose tariffs of 25%, instead of 10%, on $200 billion of imported Chinese goods. The two largest economies in the world have been in a tit-for-tat trade war over the last few months, which has weighed heavily on markets.
On Wednesday U.S. Trade Representative Robert Lighthizer said the proposed increase was due to China refusing to meet U.S. demands.
China responded that “blackmail" would not work and that it would retaliate if the U.S. continues to impose fresh trade tariffs.
Other metals were mixed on the Comex, with Silver futures falling 0.24% to $15.415 a troy ounce. Among other precious metals, Platinum Futures rose 2.14% to $834.70, while Palladium Futures increased 0.18% to $915.50 an ounce. Copper futures fell 0.75% to $2.727 a pound.