Gold prices dropped on Thursday as a result of conflicting hints from the Federal Reserve, which had held interest rates unchanged but had also issued a warning that at least two more rate increases were probable this year.

Spot gold slipped 0.2% to $1,939.01 per ounce meanwhile gold futures slumped by 0.2% to $1,950.87 an ounce.

Following the Fed's decision on Wednesday, the yellow metal reversed the majority of its intraday gains and finished level.

The potential of additional rate hikes kept traders mostly skeptical of non-yielding assets as the dollar dropped to three-week lows in response to the Fed decision, and the price of gold saw minimal support.

The Fed boosted its prediction for the benchmark rate to a peak rate of 5.6% in 2023, up from a previous projection of 5.1%, indicating at least two more 25 basis point raises. While Wednesday's decision represents the first time the bank has held rates unchanged since starting a rate hike cycle in 2022, it also indicates that the Fed will likely raise rates again in the near future.