By Gina Lee

Investing.com – Gold was down on Thursday morning in Asia, extending its losses after falling the most in two months. Investors continue to digest a from the U.S. Federal Reserve, amid hints of an “imminent” interest rate hike.

The price of $1813.95 fell by 0.86% at 12:18PM ET (5:18AM GMT). Normally, the, which is inversely related to gold, moved up Thursday.

Following the Fed’s previous meeting, the yield curve for yellow metal dropped 1.5%. Fed Chairman Jerome Powell said afterwards that the Fed would consider raising interest rates at all meetings to stop ever-increasing inflation.

The fall erased gold’s gains in 2022 to date, with the gains driven by investor bets for continuing negative real rates even as expectations of an interest rate hike grew. With the Fed’s hawkish turn challenging that bet, safe-haven gold could still be boosted by rising geopolitical risks that include the potential Russian invasion of Ukraine.

Goldman Sachs Group Inc increased its 12-month outlook on gold from $2,000 to $2,150 per ounce in response to the Fed’s decision. This was over expectations of slower U.S. economic growth and a rebounding economy excluding China. It also anticipated faster inflation.

“This combination of slower growth and higher inflation should generate investment demand for gold, which we consider to be a defensive inflation hedge,” analysts, including Mikhail Sprogis, said in a note on Thursday.

Investors await now the, expected to be delivered later that day. In the week ahead, the and will also be delivering their respective policies decisions.

Other precious metals like silver, palladium, and platinum all declined.