Gold`s Glitter Fades; Dollar Hits Fresh Highs

Published on Sep 26, 2023 14:36

Gold prices dipped below $1930 an ounce in midday Asia today pressured by strength in the US dollar which is about to break the 106 mark its highest level in ten months. A stronger US dollar and rising bond yields diminished gold`s attractiveness. The Fed`s latest meeting, where it kept interest rates steady but hinted at another hike this year and fewer cuts in 2024, contributed to the pressure on gold. Market attention is now on the upcoming release of the PCE price index, the Fed`s preferred inflation gauge, on September 29. The US dollar index reached a fresh 10-month high, driven by US treasury yields surpassing 4.5%. Comments from Minneapolis Federal Reserve Bank President Neel Kashkari, advocating for further rate hikes to combat inflation, further boosted the dollar, which hit 105.90 so far today. Silver prices held above $23 per ounce, not far from a one-month low on September 14th. Silver felt the pressure of the Fed`s hawkish stance, weak PMI data from major countries, and European central banks pausing their tightening efforts. However, positive data and measures supporting China`s economic recovery provided some support to silver.