Gold Price News: Gold Eases Lower After Stronger US Services Data

Gold prices drifted slightly lower on Thursday, as US economic data painted a stronger-than-expected picture on the economy, boosting the dollar and weighing on precious metals markets.

Prices eased as low as $2,641 an ounce, compared with around $2,660 an ounce in late trades on Wednesday.

US figures were released on Thursday showing that the ISM Services PMI rallied to 54.9 in September – the strongest growth in the services sector since February 2023, and well above market expectations of 51.7.

Signs of a stronger economy work against the need for lower interest rates, suggesting the next cut by the US Fed may be smaller than the 50-basis point cut it made on September 18. Lower borrowing costs tend to support gold, so any doubts over further cuts can weigh on the market.

The US dollar also strengthened against other major currencies in the wake of the US services data on Thursday, gaining against the euro for a fourth straight day, in a move that weighed on dollar-denominated gold prices.

However, the bullish sentiment on the US services figures was somewhat mitigated by initial US jobless claims figures for the week ending September 28, which came in slightly above expectations.

Despite the slight weakness, gold prices remain within a stone’s throw of their recent all-time highs of $2,686 an ounce seen on September 26.

Looking ahead, the markets will be watching out for the US monthly non-farm payrolls figures on Friday, as well as the unemployment rate for September, for further clues on monetary policy going forward.