Gold prices fall as data shows mixed US economy picture

Liam Langworth
2 mins

Gold prices fell as new data showed a mixed picture of the US economy, making it difficult to predict the Federal Reserve's interest rate policy.

Gold prices slipped lower on Wednesday as fresh economic data continued to paint a mixed picture of the US economy. This clouded the outlook for the Federal Reserve's interest-rate path, which weighed on the metal.

The latest data on initial unemployment claims in the US shows that the number of people filing for unemployment benefits rose by 29,000 to 219,000 in the week ended October 1st. This is higher than what analysts had forecast, although it remains at a historically low level. The increase in unemployment claims could weigh on the value of gold, since it is priced in US dollars.

Gold prices have been volatile this week, swinging up and down as investors react to changes in the outlook for interest rates. So far, data from the US economy has been a mixed bag, with some signs of strength and some weakness. The next key data point to watch will be Friday's nonfarm payrolls report.

Gold prices appear to be anchored as traders await the release of nonfarm payrolls data. Analysts are expecting mixed results, which could mean a volatile day for gold prices.

  
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It looks like the Fed is still planning to keep interest rates relatively high, even as inflation remains elevated. This could change, however, if the OPEC+ alliance decides to cut oil production significantly, as this could lead to an uptick in global prices and inflation.

The Fed's monetary policy stance has not changed since the beginning of the economic cycle in March 2022. Inflation is more important than growth, and the Fed is committed to keeping prices under control. This offset any potential price increases from energy-related inflation shocks.

Although spot gold closed lower at $1,712.43 an ounce, silver, platinum and palladium all gained. The Bloomberg Dollar Spot Index strengthened 0.7%. This shows that precious metals are still in demand despite a strong dollar.

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