Gold Futures Settle Sharply Lower

Gold prices fell sharply on Thursday, with rising expectations about an aggressive rate hike by the Fed next week diminishing the commodity’s safe-haven appeal.

The Fed is widely expected to deliver a third 75 basis-point rate hike when it meets next week.

The dollar’s weakness limited gold’s downside. The dollar index dropped to 109.42 in early New York trading and is currently hovering around 109.55, down 0.1% from the previous close.

Gold futures for December ended lower by $31.80 or about 1.9% at $1,677.30 an ounce, the lowest settlement for the most active contract since April 3, 2020.

Silver futures for December ended down by $0.300 at $19.269 an ounce, while Copper futures for December settled at $3.4900 per pound, down $0.0295 from the previous close.

In economic news, U.K. consumer confidence slipped into negative territory for the first time since June 2020, while French consumer price inflation slowed less than expected in August, separate reports showed.

Elsewhere, Germany’s wholesale price inflation eased for the fourth month in a row in August but remained at an elevated level.

In U.S. economic news, a report from the Commerce Department showed an unexpected increase in retail sales in the month of August, although the sales growth followed a revised decrease in July.

The report showed retail sales rose by 0.3% in August following a revised 0.4% decrease in July. Economists had expected retail sales to come in unchanged, matching the unchanged reading originally reported for the previous month.

A separate report released by the Labor Department said initial jobless claims slipped to 213,000 in the week ended September 10th, a decrease of 5,000 from the previous week’s revised level of 218,000.

Economists had expected jobless claims to inch up to 226,000 from the 222,000 originally reported for the previous week.

With the unexpected dip, jobless claims fell to their lowest level since hitting 202,000 in the week ended May 28, 2022.

Meanwhile, another Labor Department report said import prices slid by 1% in August after tumbling by a revised 1.5% in July. Economists had expected import prices to decrease by 1.2% compared to the 1.4% slump originally reported for the previous month.

The report also showed export prices dove by 1.6% in August after plummeting by a revised 3.7% in July.

Export prices were expected to decline by 1.1% compared to the 3.3% plunge originally reported for the previous month.

However, the Federal Reserve also released a report that showed industrial production edged down by 0.2% in August after climbing by a downwardly revised 0.5% in July. Economists had expected industrial production to inch up by 0.2% compared to the 0.6% increase originally reported for the previous month.

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