Gold prices declined on Thursday as investors drastically cut their price forecasts for the yellow metal in the coming month, following the Federal Reserve's warning that US interest rates will stay higher for longer.

Spot gold dipped 0.1% to $1,928.12 per ounce, meanwhile gold futures dipped 1% to $1,948.05 per ounce, demonstrating that traders were anticipating considerably lower gold prices in the future, particularly in light of an expected increase in interest rates.

As was generally predicted, the central bank kept interest rates unchanged on Wednesday.

Jerome Powell, the Fed's chair, issued a warning, noting that recent inflation hikes and the job market's resiliency give the Fed more leeway to maintain higher interest rates. Powell also said that this year might see at least one more rate increase.

Markets had not anticipated Powell's speech to be as hawkish as it was, and the Fed chair also predicted that through 2024, U.S. interest rates will trend around 5.1%.