Gold prices slipped, while oil prices surged close to $75 a barrel Thursday. The movements were knee jerk reactions to fundamental factors that expanded trends driven by investor expectations for the direction of both commodities.

Gold prices dropped by more than 1% after the U.S. Federal Reserve announced projections of possible post-pandemic rate hikes into 2023. In its projections, the agency expects to have at least a two-quarter-point interest rate hike by 2023.

The projection is a reversal of the Federal Reserve's previous pledge to keep supporting policies in place to encourage economic recovery.

"The Fed has a gameplan that they're going to be a removing all this accommodation and it's just this initial knee jerk reaction (in gold)" analysts at OANDA said.

Spot gold fell by 1.1% to $1,839.06 per ounce, while U.S. gold futures dropped by 0.3% to $1,861.40 per ounce. Analysts expect gold to fall further towards $1,830 per ounce as the rest of the market reacts to the Federal Reserve's report.

Also on Thursday, oil prices increased for a fifth day, reaching nearly $75 a barrel. Prices jumped as a reaction to the Federal Reserve's projection and as more refiners in the U.S. are tapping into their crude inventories to keep up with the recovering oil demand.

According to the U.S. Energy Information Administration, crude inventories across the nation fell by more than 7.4 million barrels, while refining utilization grew to 92.6%. The agency said the inventory draw was stronger than expected and the export data signaled a rapidly recovering global demand.

Brent crude hit its highest price since April 2019, gaining 0.5% to about $74.39 a barrel. U.S. crude rose to $72.15 a barrel, dropping slightly from a high of $72.99 a barrel.

"With refinery runs over 16 million barrels per day and exports continuing to be robust, it is going to be difficult for inventories to avoid consistent draws as we push on to the peak of summer driving season," commodity analysts at ClipperData said.

Analysts said further oil price hikes are to be expected in the coming quarters given the recent projections made by the Federal Reserve.

"The oil complex digested the Fed news quite well in suggesting that some more crude price highs likely lie ahead," analysts at Ritterbusch and Associates said.