Gold steadied after plunging to its lowest level in two years, as economic data from the US increased the likelihood of prolonged monetary tightening and stoked fears of recession.
Bullion had been hovering above $1700 an ounce for most of September but plummeted as low as $1 660.50 on Thursday. A gauge of the dollar’s strength rose 0.2% and remains close to a record high.
Bullion hasn’t benefited from the worsening backdrop, despite its traditional role as a hedge in tough economic times. The Federal Reserve is increasingly expected to implement a rate hike of at least 75 basis points next week. Higher rates tend to weigh on non-interest bearing bullion.
Applications for US unemployment insurance fell for a fifth straight week, and while retail sales unexpectedly rose in August, the prior month’s number was revised sharply lower. Meanwhile, total industrial production for the month, including mining and utilities, fell.
Those reports came on the heels of US consumer and producer price indexes earlier this week that showed inflationary pressure in the economy.
Gold spot was flat at $1,663.54 an ounce at 10:54 a.m. in Singapore, after closing down 2% in the previous session. Silver and platinum were lower, while palladium was little changed.
