22nd September 2023 – (New York) On Thursday, global stock markets experienced a notable downturn, with the Dow Jones Industrial Average dropping 370.46 points, or 1.08 per cent, to close at 34,070.42. The S&P 500 followed suit, sinking by 72.20 points, or 1.64 per cent, ending the day at 4,330.00. Similarly, the Nasdaq Composite Index shed 245.14 points, or 1.82 per cent, closing at 13,223.98. Meanwhile, the U.S. dollar strengthened in late trading.
During the day, the dollar index, which measures the greenback against six major currencies, rose by 0.23 per cent, reaching 105.362 at 3:00 p.m. This increase in the value of the U.S. dollar had a direct impact on gold futures traded on the COMEX division of the New York Mercantile Exchange.
The most active gold contract for December delivery experienced a decline of 27.50 U.S. dollars, or 1.40 per cent, ultimately closing at 1,939.60 dollars per ounce. The rise in the U.S. dollar index and U.S. Treasury yields contributed to the fall in gold prices.
The Federal Reserve, in its recent announcement, decided to maintain the interest rate unchanged. However, it did not rule out the possibility of a rate hike at its November meeting. This hawkish signal from the Fed, indicating a potential extension of higher interest rates, triggered a rally in the U.S. dollar, dampening the demand for gold.
On the economic front, the data released on Thursday presented a mixed picture. The U.S. Labor Department reported a decrease of 20,000 in jobless claims, reaching 201,000 for the week ending September 16. This figure represents the lowest number since the final week of January, suggesting a positive trend in the job market.
In contrast, the Federal Reserve Bank of Philadelphia reported a significant drop in its diffusion index for current activity. The index plummeted to a negative 13.5 in September from a positive 12.0 in August. Economists had anticipated a less severe decline to a negative 0.7, highlighting the unexpected downturn.
Furthermore, the National Association of Realtors shared data revealing a 0.7 per cent decrease in U.S. existing home sales for August compared to July. The seasonally adjusted annual rate stood at 4.04 million, falling short of the economists’ expectation of a 4.10-million pace. Sales also slumped by 15.3 per cent compared to the same period last year, reflecting a cooling housing market.
In the precious metals market, silver prices also experienced a decline. The December delivery for silver fell by 14.90 cents, or 0.63 per cent, closing at 23.687 dollars per ounce. Similarly, platinum for October delivery faced a decrease of 17.70 dollars, or 1.88 per cent, ending the day at 924.60 dollars per ounce.