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Trends & Analysis
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Trends & Analysis
News

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News

Walmart’s stock hits record high on Q1 results

News

Crude oil rises on US supplies, inflation data

News

Another nice quarter for NVIDIA?

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Alibaba delivers earnings miss, shares slide

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USD edges lower ahead of key economic reports

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Gold loses shine amid strength in US dollar

Tuesday, October 03, 2023

Today’s headlines

What’s happening: Gold prices moved lower on the first trading day of the week.

What happened: The yellow metal extended its five-session losing streak to decline to around a seven-month low on Monday.

Strength in the US dollar amid prospects of another interest rate hike by the Federal Reserve has been exerting pressure on gold prices.

Why it matters: Gold prices climbed earlier in the year and breached the major $2,000 per ounce resistance level in May. However, the yellow metal has lost more than 11% since then, amid strength in the greenback and a sharp rise in US Treasury yields, which generally makes the non-yielding bullion less attractive for investors.

The US released better-than-expected manufacturing data on Monday, which fuelled investor risk sentiment and weighed on the safe-haven metal. The ISM manufacturing PMI surged to 49 in September, versus 47.6 in the previous month. The figure also topped market expectations of 47.8. The latest reading signalled the slowest contraction in the country’s manufacturing activity in ten months.

The greenback climbed on the news, exerting pressure on gold, as strength in the US dollar makes commodities and metals more expensive for foreign currency holders.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained over 0.6% to 106.90 on Monday.

Gold for December delivery declined $18.50 to $1,847.20 an ounce on Monday.

In other metals, silver for December delivery lost $1.03 to reach $21.42 an ounce. December copper shed 10 cents to settle at $3.64 a pound, while platinum declined around 2% to $886.8 and palladium lost around 3% to $1,205.90.

What to watch: Investors will continue monitoring comments from the US Federal Reserve for signs of the central bank’s hawkish or dovish stance. The release of non-farm payrolls data by the US, scheduled for later this week, will also remain in focus.

The markets today

The British pound will be in focus today after closing lower on Monday

Context: The GBP/USD forex pair declined sharply on Monday, after recording losses last month.

Details: The GBP/USD extended its decline on the first trading day of the month, following a weak performance in September. The forex pair lost 3.7% in September to record its worst monthly performance in a year.

Last week, the GBP/USD declined to 1.2111, its weakest level since March. Although the forex pair recovered form that, it extended its plunge on Monday, moving lower than last week’s lows.

Strength in the greenback also weighed on the pair, after US data showed the manufacturing sector inching towards the expansion zone.

Data released by the UK did not help the decline in the GBP/USD. Britain’s Nationwide House Price Index fell 5.3% year-over-year in in September, while prices came in unchanged on a monthly basis. The S&P Global/CIPS manufacturing PMI for the country rose to 44.3 in September, from a preliminary reading of 44.2 and above the 39-month low of 43.0 recorded in August.

The GBP/USD forex pair fell sharply to 1.2086 on Monday. London’s FTSE 100 also shed 1.28% to close at 7,510.72, recording its steepest plunge since mid-August.

What to watch: With no major economic reports due for releases today, traders will watch key economic data from the US. Investors await the release of data on services and composite PMIs from the UK on Wednesday. Analysts expect the S&P Global/CIPS UK services PMI to decline to 47.2 in September, from 49.5 in the prior month, while the composite PMI is expected ti decline to 46.8 in September, from 48.6 in August.

Other Markets: US trading indices closed mostly higher on Monday, with the S&P 500 and Nasdaq 100 up by 0.01% and 0.83%, respectively, and the Dow Jones index down by 0.22%.

The news shaping the markets

Germany’s economy minister said that its exports of military equipment to Ukraine had climbed over fourfold so far this year. The news sent the safe-haven US dollar index higher this morning.


Australia’s job advertisements fell by 0.1% in September, following a 1.7% increase in the prior month, which exerted pressure on the AUD/USD forex pair.


Brazil reported a trade surplus of $8.9 billion in August. This being more than the $3.7 billion surplus recorded in the year-ago month sent the BRL/USD pair slightly higher in forex trading this morning.


Mexico’s S&P Global manufacturing PMI declined to 49.8 in September, from 51.2 in the prior month. This was the first contraction in eight months and exerted pressure on the MXN/USD forex pair.


Colombia’s Davivienda manufacturing PMI rose to 47.8 in September, from 46.8 a month ago, sending the COP/USD pair slightly higher in forex trading this morning.

What else to watch today

France’s government budget value, Spain’s unemployment change, number of foreign tourist arrivals and total vehicle sales, Turkey’s Inflation rate, producer price inflation and balance of trade, Brazil’s IPC-Fipe inflation and industrial production, Mexico’s foreign exchange reserves and gross fixed investment, US Redbook index, job openings, job quits, IBD/TIPP economic optimism index, Logistics Manager’s Index and API crude oil stocks change, Singapore’s manufacturing PMI, as well as Germany’s new passenger car registrations.


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