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Gold price is fighting its own battle against soaring Treasury yields and the rising US dollar. Gold has lost about $40 on the day and hopes for a catalyst to rebound. The market is getting more nervous that the monetary mistake would lead to a severe session for gold like today’s US session. Gold and silver prices were lower in early US trading Thursday, with gold falling to a seven-week low hitting $1664.70 per ounce versus Wednesday’s closing price at $1696.79.
The US dollar holds its dominance across the forex board. Bets on continuing aggressive rate hikes by the Fed dominates the markets. the Dollar Index ended the North American session flat but put in a high of 109.21 within the upper end of this week’s bullish channel having climbed from a low of 109.42
Canada’s currency slides to 2-month low on risk aversion, so, the Canadian dollar weakens 0.4% against its American counterpart. The current level touches its weakest since July 14 at 1.3214.
GBP/USD bulls were attempting a correction from an important support area near the midpoint of the 1.1400 area, with the price recovering from a low of 1.1462 and now testing the bear’s commitments at 1.1500.
EUR/USD remained trapped between a key 4-hour channel and consolidated ahead of 1.0025 and 0.995 breakout levels. On an hourly basis, the pair moved sideways, coiling for a move either way.
Economic Data
Retail Sales moved up 0.3% last month and the US dollar has held near recent peaks, supported by the view that the Federal Reserve will keep tightening policy aggressively.
The latest data, including this week’s surprise CPI reading for August, has reinforced the bullish case for the greenback as investors price in a third consecutive 75-basis-point rate hike next Wednesday.
Other Developments
Japan has got a long history of interventions to stop the yen from falling. Efforts to stop the yen’s sharp falls through unilateral market intervention could only have a limited impact according to a senior member of the country’s ruling party as data showed the Yen’s latest drop is blowing the trade gap out to a record.
US 10-year yield climbed 5bps to 3.45%, and key majors, such as the yen came back under pressure despite authorities that verbally intervened, jawboning the currency following sharp declines.USD/JPY fell to 143.33.
As for the Australian dollar, it traded between a daily high at around 0.6770 and the bears moved in on the key 0.67 level, piercing it to a low of 0.6899.
The price levelled out after yesterday’s employment report was solid, adding 33.5K employments in August, in line with forecasts, while the unemployment rate rose to 3.5% from 3.4%. ANZ bank analysts expect that the Reserve Bank of Australia (RBA) will lift rates by 50 bps.
On the commodities front, WTI fell to $84.9/bbl as the US Department of Energy said their restocking of oil reserves would likely involve deliveries after the fiscal year 2023. Gold slipped 1.4% to $1,662.
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