Bullion Continues To Weaken As Rate Cut Expectations Postponed

Gold prices fell 0.9% on Friday driven by a stronger greenback during the NY session. It is down another 0.3% to $1843.84/oz during the APAC session today although trading is thin with a number of holidays across the region. It is off its intraday low of $1842.94 but is still at its lowest since before US banking troubles erupted in early March. The USD index is 0.1% higher.

• The fall in bullion to below $1900/oz triggered ETF outflows, and exacerbated the sell-off, according to Bloomberg.
• S&P e-minis are up 0.6% today as risk appetite improved following the avoidance of a US government shutdown on the weekend.
• Expectations that interest rates will be higher for longer thus postponing the start of monetary easing has pushed bond yields higher across the OECD and weighed on gold prices. They are approaching support at $1839.
• Later Fed Chairman Powell and Fed’s Harker and Williams speak. US manufacturing ISM/PMIs for September and August construction spending print. European manufacturing PMIs are also released and the euro area unemployment rate. BoE’s Mann is scheduled to speak.