Gold prices steady as markets absorb policy prospects

Gold prices finished flat today, Sept. 14, as investors parsed news data that reflected the resilience of the US economy, in light of statements from the Eurozone indicating the end of the interest rate tightening cycle.

Data released today showed that US retail sales rose by 0.6% in August, surpassing the predicted rise of 0.20%, thanks to higher gasoline prices. Meanwhile, initial unemployment claims jumped to 220,000 applications, albeit below expectations for 225,000.

The US Producer Price Index gained 0.70% in August — the highest increase in more than a year, beating the 0.4% estimate, compared to 1.6% in the same month last year.

On the monetary policy front, the European Central Bank (ECB) today lifted interest rates by 25 basis points.

Markets are pricing in a 97% chance that the Federal Reserve will fix interest rates at the current 5.25-5.50% range during the rate-setting committee’s meeting next week, according to the CME FedWatch Tool.

This came on the heels of signals from ECB President Christine Lagarde that interest rates are now at levels that, if maintained for a sufficiently long period, would help tame inflation to target, hinting that the current hiking cycle is over.

In terms of trading, bullion for December delivery held ground to close at $1,932.80 per ounce, after plummeting to $1,921.70 an ounce in early trading.

The US dollar index, which measures the performance of the US currency against a basket of six major currencies, climbed by 0.60% to 105.40 points at 08:45 pm Makkah time, snapping a six-month high.