The dollar index fell 0.1%, but not far from a 20-year high hit on Thursday in the wake of a 75 basis point rate hike by the U.S. central bank and its hawkish outlook. Rising rates reduce the attractiveness of bullion since it pays no interest. Gold prices have fallen nearly 20% since breaking above $2,000 an ounce in March.
Many central banks raised interest rates this week, following the US Federal Reserve’s fight against inflation, which sent shockwaves through financial markets and the economy. Inflation in the euro zone is expected to rise and price growth should be more persistent than previously thought, European Central Bank board member Isabel Schnabel said on Thursday, defending the ECB’s plans. to raise rates further.
The number of Americans filing new claims for unemployment benefits increased moderately last week, indicating that the labor market remains tight despite the Fed’s attempt to cool demand with aggressive rate hikes. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.21% to 950.13 tonnes on Thursday from 952.16 tonnes on Wednesday.
Spot silver was flat at $19.64 an ounce, platinum rose 0.3% to $903.22, while palladium fell 0.2% to $2,165.10. DATA/EVENTS (GMT) 0715 France S&P Global PMI Flash Sept 0730 Germany S&P Global PMI Flash Sept 0800 EU S&P Global PMI Flash Sept 0830 UK Flash PMI Sept 1345 US S&P Global PMI Flash Sept 1800 “Fed Listens: Transitioning to the Post- Pandemic Economy” in Washington