Gold bounces back on weak dollar, US economic data

gold bounces back on weak dollar, us economic data

Gold rose $38.67 an ounce or 2.2% to $1,701 an ounce on Monday night, making it the biggest single-day gain since March. (Photo: Chakrapan Natanri)

Gold prices rebounded sharply to pass US$1,700 an ounce as the US dollar weakened and recently released US economic data were worse than expected.

Gold rose $38.67 an ounce or 2.2% to $1,701 an ounce on Monday night, making it the biggest single-day gain since March.

The increase prompted the Gold Traders Association to adjust the local price by 450 baht yesterday morning.

After the adjustment, bullion is priced at 30,250 baht per one-baht gold to buy and 30,350 for sale.

YLG International, Thailand’s leading gold trader, said the price rally was supported by the weakening US dollar.

The worse than expected US economic data eased investors’ concerns about the Federal Reserve’s accelerating interest rate hikes, said the broker.

US economic figures were lower than analysts’ forecasts. The Manufacturing Purchasing Manager Index released by the Institute of Supply Management fell to 50.9 in September, the lowest level in two-and-a-half years, compared with analysts’ estimates of 52.3.

Construction spending also dropped 0.7% month-on-month, the biggest decline since February 2021.

The gold price rally was also supported by a continued decline in US Treasury bond yields.

Traders weighed concerns that central banks’ monetary tightening will lead to recession and the possibility that bond rates may have reached a peak.

The market is expected to monitor job opening data, which analysts expected to increase to 11.4 million jobs, and August factory orders, with the market anticipating an increase of 0.2%.

The gold price is projected to move sideways up, with analysts expecting support at $1,680 an ounce and resistance at $1,710.

Meanwhile, the Stock Exchange of Thailand Index rebounded 18.96 points in the morning session, rising 1.22% to 1,577.01, in line with a rally of global stocks on investor buybacks after an urgent Fed meeting on Monday made no surprise announcement.

Cryptocurrency market capitalisation also rebounded, surging 3% Tuesday afternoon to $994 billion, with the Bitcoin price rising 3.6% from the previous day to $19,897.20 on the weakening US dollar and poor economic data.