Gold dropped for a fifth day, its longest losing run since February, after the Federal Reserve paused interest-rate increases but signaled it wasn't done with monetary tightening just yet.

The prospect of more rate hikes, generally negative for the precious metal as it doesn't offer interest, saw gold break below the $1,940 to $1,980 an ounce trading range that it's been in this month. The metal is now on track for its lowest close in three months.

Short-term Treasury yields rose after the US Fed projected more hikes than the market anticipated, while Chair Jerome Powell said any cuts were probably a couple of years out. Swaps traders are no longer pricing in a loosening this year, a dramatic turnaround from last month.

The prospect of tighter monetary policy for longer should undermine non-yielding gold, which tends to be negatively correlated with long-term interest rates. Prices of the metal, however, remain at relatively elevated levels even as demand for the haven asset has faded with the US debt-ceiling standoff resolved and concerns about the banking sector fading.

Spot gold declined 0.6% to $1,931.47 an ounce by 9:29 a.m. in London, and has fallen about 1.7% in five trading sessions. The Bloomberg Dollar Spot Index rose 0.1% after dropping 0.5% in the prior two sessions. Silver, platinum and palladium also slipped.

Source : Bloomberg