Gold prices fell in European trading on Thursday, extending losses for a third consecutive session and nearing a two-week low, with the metal at risk of losing its foothold above the $4,000 per-ounce mark due to the continued strength of the US dollar in foreign-exchange markets.
Investors are awaiting key US inflation data, scheduled for release later this week, for further clues about the path of interest rates.
Price Overview
• Today’s gold price: Spot gold fell 0.8% to $4,066.24, down from an opening level of $4,098.19, after reaching an intraday high of $4,129.66.
• On Wednesday, gold lost 0.65% for a second straight daily decline, touching a two-week low at $4,004.56 per ounce.
• The metal has entered a sharp correction phase after Tuesday’s plunge, which marked its biggest one-day drop in five years, as heavy profit-taking followed record highs near $4,381.73 per ounce.
US Dollar
The US dollar index rose more than 0.2% on Thursday, resuming gains after a brief pause the previous session, reflecting continued strength of the greenback against major and minor currencies.
A stronger dollar makes gold, which is priced in US dollars, less attractive to buyers holding other currencies. The dollar’s rise comes as investors continue to view it as the most appealing asset at the moment, particularly amid growing expectations that major central banks in the UK, Japan, Canada, and Australia will shift toward more accommodative policies to support their slowing economies.
US Interest Rates
• According to CME’s FedWatch tool, markets are currently pricing in a 97% probability of a 25-basis-point rate cut at the Federal Reserve’s October meeting, with just a 3% chance of no change.
• To reassess these probabilities, investors are closely watching the release of US consumer inflation data for September, expected Friday, though publication could be delayed to next week.
Outlook for Gold
Brian Lan, managing director at Singapore-based Gold Silver Central, said: “We’ve seen a natural correction after the recent rally in gold prices, and there is still some downward pressure. We expect prices to consolidate before continuing their upward trend.”
Lan added: “At this stage, we remain optimistic about gold in the long term, but short-term investors should be cautious given the elevated volatility.”
SPDR Gold Trust Holdings
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 6.29 metric tons on Wednesday to 1,052.37 metric tons, down from 1,058.66 metric tons — the highest level since June 24, 2022.
