Why is gold getting cheaper? Markets are reacting to the U.S. Federal Reserve’s (Fed) interest rate hike, trading data, and expert commentary show.

Gold is getting cheaper again – what’s going on?

The December gold futures price on the New York Comex Exchange declined by $20.2, or 1.22%, to $1,629.8 per troy ounce. December silver futures fell 1.13% to $19,372 an ounce.

The Federal Reserve expectedly raised its benchmark interest rate by 75 basis points to 3.75-4% per year on Wednesday. The regulator raised the rate at that rate for the fourth consecutive time. The Fed noted that further rate hikes would be appropriate. Traditionally, rate hikes have supported the dollar, making gold less available for purchase in other currencies and making sure that the price of the precious metal falls.

“The Fed’s actions have painful implications for gold as Fed Chairman Jerome Powell has made it clear that rates will be significantly higher,” Oanda Senior Market Analyst Edward Moya told MarketWatch.

Earlier we reported that the Central Bank of China was assured of the stability of the Chinese yuan.