As the currency and yields rise, gold is hovering near a six-month low

28 Sep 2023 , 10:28 AM

As the dollar and Treasury rates lingered at high levels as the markets awaited U.S. economic data for hints on the Federal Reserve’s interest rate path, gold moved up on Thursday but remained close to a more than six-month low reached in the previous session.

Spot gold increased by 0.1% to $1,876.89 per ounce after falling 1.4% on Wednesday, its worst daily loss in two months. To $1,894.20, U.S. gold futures increased by 0.17%.

In contrast to its major counterparts, the dollar reached a 10-month high, and Treasury yields reached a new 16-year high as investors wagered that the U.S. economy will outperform its rivals in an environment of high-interest rates.

The opportunity cost of storing bullion, which is valued in dollars and does not pay interest, increases as interest rates rise.

Orders for durable American-made goods increased in August as a rise in machinery and other products offset a decline in civilian aeroplanes. Business spending on equipment also appeared to pick up steam after sputtering in the first half of the third quarter.

On Wednesday, Republican U.S. House Speaker Kevin McCarthy rejected a stopgap funding package that was moving forward in the Senate, bringing the fourth partial shutdown of the American government in a decade closer with only four days left.

The August personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, is due on Friday, and the market’s attention now shifts to the revised U.S. GDP growth rate for the second quarter and weekly unemployment claims due later in the day.

Spot silver prices increased 0.2% to $22.56 per ounce, platinum prices increased 0.3% to $890.01, and palladium prices increased 0.3% to $1,225.01.

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