Gold plunges the most since year-start

Gold prices inched lower at settlement today, Sept. 28, ahead of the release of US economic readings that will provide cues about the interest rates path, amid growing expectations of monetary tightening by the Federal Reserve.

Data from the US Department of Labor revealed that initial jobless claims jumped by 2,000 to 204,000 applications in the week ended Sept. 23, against forecasts for a rise to 215,000 claims.

The US economy grew in the second quarter of this year at a 2.1% clip, in line with consensus, supported by increased business investment, consumer spending and state expenditures.

On the other hand, long-term mortgage interest rose this week to a 23-year high of 7.31% as worries of a US government shutdown reinforced the rise in 10-year Treasury yields, which touched the highest levels since 2007.

Tomorrow, Sept. 29, the August reading for the Personal Consumption Expenditures Index — the Federal Reserve's preferred inflation gauge — is due to be out, which markets are closely watching to predict more about the future of US monetary policy.

In terms of trading, bullion for December delivery contracted by 0.65%, or $12.30, to finish at $1,878.60 per ounce — the lowest close since Dec. 22, 2022.

Limiting the yellow metal’s losses, the US dollar index, which measures the performance of the US currency against a basket of six major currencies, shed 0.40% to stand at 106.26 points at 08:43 pm Makkah time.