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By Bloomberg

Gold extended a drop from a three-week high after the Federal Reserve kept open the prospect of raising interest rates.

The Fed said on Wednesday that U.S. growth will rebound to a “moderate pace,” damping speculation that rate increases may be delayed until 2016. It released its policy statement after data showed the economy sputtered to a near-halt in the first quarter. Higher rates curb gold’s appeal because the metal generally only offers returns through price gains.

“Moves in the gold market over the past two days have been all about the Fed,” Bernard Dahdah, an analyst at Natixis SA in London, said by phone. “The market continues to oscillate around $1,200 an ounce. Barring news out of Europe, that probably won’t change unless the view for U.S. rates becomes clearer.”

Gold for June delivery dropped 0.6 percent to $1,202.70 an ounce by 6:06 a.m. on the Comex in New York. Prices, which reached a three-week high on April 28, are up 1.6 percent in April, set for the first monthly advance in three. Bullion for immediate delivery was little changed at $1,205.92, according to Bloomberg generic pricing.

Economists surveyed by Bloomberg last week predicted officials will wait until September to raise interest rates, amid recent economic reports that came in below forecasts. Fed Chair Janet Yellen and her colleagues blamed the winter slump partly on “transitory factors,” according to Wednesday’s statement.

Silver for immediate delivery added 0.3 percent to $16.6125 an ounce in London, and was little changed this month. Platinum lost 0.2 percent to $1,151.88 an ounce, and is up 0.9 percent in April. Palladium fell 0.1 percent to $782 an ounce. It gained 6.2 percent in April, set for the biggest monthly increase since July 2013.