WASHINGTON (dpa-AFX) - Gold prices fell sharply on Thursday as yesterday's interest rate cut decision by the US along with today's better-than-expected initial jobless claims report strengthened the US dollar and weighed on the precious metal.
Front Month Comex Gold for September delivery fell by $38.10 (or 1.03%) to $3,643.70 per troy ounce.
Front Month Comex Silver for September delivery edged down by 1.50 cents (or 0.04%) to $41.707 per troy ounce.
On the economic front, data released by the US Department of Labor today revealed that initial jobless claims in the week ended September 13 sank by 33,000 from the previous week to 231,000 while continuing jobless claims (a proxy for people receiving unemployment benefits), decreased to 1,920,000.
For the week ending September 13, the 4-week moving average for initial jobless claims decreased to 240,000.
Separately, data released by the Federal Reserve Bank of Philadelphia on manufacturing showed that the index rose to 23.2 in September.
Yesterday, at the end of a two-day monetary policy meeting of the US Federal Open Market Committee, the US Federal Reserve initiated highly anticipated rate cuts by lowering the target range by 25 basis points to 4.00% to the 4.25%. Notably, by the end of this year, the central bank expects to cut another 50 basis points
Following the Fed's announcement, the US Dollar was up against many of its rivals, making gold holding costs more expensive for other currency holders.
The central bank's new economic projections that have drawn equal attention by traders read that core inflation is not projected to reach the Fed's 2% target until 2028. With this, concerns of stagflation have been reignited.
Of note, in his news conference following the rate announcement, US Fed Chair Jerome Powell said unemployment is still low but warned there are downside risks.
On the geopolitical front, in the ongoing Russia-Ukraine war, Ukrainian President Volodymyr Zelensky stated that this month alone, Russia had launched 3,500-plus drones and nearly 190 missiles against Ukraine.
The Middle East continues to remain tense after last week's attack on Doha by Israeli Defense Forces targeting Hamas leaders stationed there.
These attacks have received widespread condemnation and united Arab and Muslim leaders in support of Qatar.
However, Israeli PM Benjamin Netanyahu has vowed to carry out similar strikes on Hamas leaders 'wherever they are,' increasing concerns of an escalation.
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