Yesterday, the yellow metal continued its downward movement, starting a day earlier. The strong dollar, soared to a near 3-week high, accelerated its fall and kept it permanently in the red zone
Thursday trading was the worst for gold, not only for the current 7-day period, but for 6 weeks as well. The last time the precious metal experienced a flash crash was on August 6. At that time it plunged $45.80, or 2.5%.
On September 16, gold bullion was down $38.10, or 2.1%. At the close of the New York Stock Exchange COMEX, it was trading at $1,756.70. Despite falling below $1,750 during the day, the asset managed to break through the red zone at the end of the session.
Yesterday, a strong dollar blocked gold's way to rise. By the end of Thursday, the US currency consolidated by 0.4% against its main rivals.
Strong US economic data, which raised expectations for an earlier tightening of the Fed's monetary policy, was the main source of energy for the greenback.
US retail sales rose by 0.7% last month. Economists, on the contrary, had expected a decline of 0.8%. The index increased partly due to school shopping.
Also yesterday, the Federal Reserve Bank of Philadelphia reported positively. The region's business activity index surged to 30.7 points in September from 19.4 points in August. Thus, the index interrupted a series of declines, happening for 4 months in a row.
This news met investors' expectations of the Fed's meeting next week. With the US steady economic recovery, the central bank may announce the terms for starting to reduce asset purchases pace.
This prospect exerted a powerful influence on the dollar. Its index showed the strongest daily gain over the month. Anticipating a sooner stimulus tapering, the greenback ignored even an alarming signal from the labor market.
According to the report published on Thursday, last week the number of initial jobless claims in the USA rose by 20,000 up to 332,000.
Meanwhile, a flurry of economic data, affecting the market sentiment, is due today. Traders anticipate the University of Michigan's consumer confidence index release for September. Economists expect the index to go up to 72.2 points against 70.3 in August.
Awaiting the report, the dollar is declining after yesterday's sharp rise. At the time of release, it dropped by 0.09% to 92.85 points. In contrast to the dollar, gold went up slightly. In the morning it added 0.16%, or $2.75, and was trading at $1,759.45.
However, the experts do not face any prospects of the precious metal growth in the near future. Taking into account the last bullion's jumps and the Fed's intention to taper bond purchases, Jeff Wright, analyst at Wolfpack Capital believes that gold keeps further falling in the short-term period. According to Wright, there is no positive trigger in the market right now.
Besides, other popular metals went down simultaneously with the yellow asset yesterday, except for palladium, which showed gains for the second session in a row. Notably, earlier this week it plunged to a year low.
Palladium soared 1.5% to $2,021.50 on Thursday. Meanwhile, silver closed down 4.2% at $22.79, its lowest level since November last year. Copper dropped by 2.8% to $4.28. Platinum fell by 0.8% to $923.30.
