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Trends & Analysis
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Monday, September 25, 2023

Today’s headlines

What’s happening: Gold prices edged higher on the last trading session of week.

What happened: The yellow metal rebounded slightly on Friday, after recording its worst session in around two months on Thursday.

Despite the recovery, gold prices still settled the rollercoaster week on a slightly lower note following the Federal Reserve’s interest rate decision.

Why it matters: Investors digested hawkish remarks from the US Federal Reserve and waited for more comments from policymakers for clues on the rate outlook.

The US central bank kept interest rates unchanged last week but signalled one more rate hike of 25 basis points before the end of the year. Gold prices fell sharply on the central bank’s hawkish stance, as the non-yielding yellow metal generally loses favour among investors when rates are increased.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, eased slightly on Friday, after hitting a six-month high. Weakness in the US dollar makes commodities and metals less expensive for foreign currency holders and boosts their demand.

Safe-haven gold was also supported by weak economic data from the US. The country’s manufacturing PMI climbed to 48.9 in September, from August’s reading of 47.9. Despite the improvement, manufacturing output remained in the contraction zone. US services PMI declined to 50.2 in September, from 50.5 a month ago, and missed market estimates of 50.

Gold for December delivery gained $6, or 0.3%, to close at $1,946.20 per ounce on Comex, ending the week in the red.

In other metals news, December silver added 16 cents, or 0.7%, to close at $23.84 per ounce on Friday, adding around 2% last week. October platinum gained by 1% to $934.10 per ounce, up 0.5% for the week, while December palladium slipped 1.1% to $1,256 per ounce, recording a 0.3% weekly gain. Copper for December closed almost flat at $3.696 per pound, with losses of 2.8% in the week.

What to watch: Traders await further remarks from the US central bank’s policymakers. Investors will also monitor the US dollar movement and data showing the health of the global economy.

The markets today

European stocks will be in focus today after closing mostly lower on Friday

Context: European equities settled mostly lower on Friday, as investors assessed the release of economic reports.

Details: Global investors digested interest rate decisions from leading central banks. The US Federal Reserve maintained its key rates at 5.25%-5.50% during its Wednesday meeting. However, policymakers indicated a rate hike of 25 basis points by yearend.

The Bank of England held its interest rates at the September meeting, while the Bank of Japan maintained interest rates at -0.1% on Friday.

The HCOB Eurozone composite PMI improved to 47.1 in September, topping market estimates of 46.5. Services PMI rose to 48.4 in September, from 47.9 a month ago, while manufacturing PMI slipped to 43.4, from 43.5 in August.

The STOXX Europe 600 Index fell 0.31% to close at 453.26 on Friday, recording a weekly loss of around 1.6%. This marked its weakest performance since mid-August. Construction and material stocks were among the worst performers on Friday, while tech stocks bucked the overall market trend to close higher.

Germany’s DAX 40 slipped 0.09% to close at 15,557.29 on Friday, losing more than 2% last week, the most since mid-August.

London’s FTSE 100 rose 0.07% to settle at 7,683.91 on Friday, but lost around 0.5% on the week, as markets speculated on the impact of the latest economic reports on the Bank of England’s rate decisions ahead.

What to watch: Investors await the release of several economic reports from European nations on Monday. Markets will also focus on ECB (European Central Bank) President Christine Lagarde’s speech today.

Other Markets: US trading indices closed mostly lower on Friday, with the Dow Jones index and S&P 500 down by 0.31% and 0.23%, respectively, and the Nasdaq 100 up by 0.05%.

The news shaping the markets

The Russian Defense Ministry said a Ukrainian missile strike hit the main headquarters of its Black Sea Fleet. The news sent the safe-haven US dollar index slightly higher this morning.


Taiwan’s industrial production declined by 10.53% year-over-year in August. This being the 15th straight month of decline exerted pressure on the TWD/USD forex pair.


Canada’s retail sales contracted by 0.3% in August, which sent the CAD/USD pair lower in forex trading this morning.


Mexico’s economic activity grew by 3.2% year-over-year in July. This was lower than the 4.1% gain in the prior month and exerted pressure on the MXN/USD forex pair.


Ireland’s wholesale prices declined by 0.3% year-over-year in August. This being the fifth month of contraction sent the EUR/USD pair lower in forex trading this morning.

What else to watch today

Spain’s producer prices, Turkey’s business confidence, capacity utilization, Germany’s Ifo business climate index, Ifo current conditions indicator and Ifo expectations, UK’s CBI distributive trades, Brazil’s FGV Consumer confidence, current account, foreign direct investment and Central Bank of Brazil focus market readout, as well as US Chicago Fed national activity index and Dallas Fed Manufacturing index.


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