Forex Today: Relentless Gold rally continues, focus shifts to PMI data
Here is what you need to know on Tuesday, September 23:
Gold (XAU/USD) continues to push higher early Tuesday and notches a new all-time-high above $3,750 after rising more than 1.5% on Monday. The economic calendar will feature preliminary September Manufacturing and Services Purchasing Managers' Index (PMI) data from Germany, the Eurozone, the UK and the US on Tuesday. Later in the American session, Federal Reserve (Fed) Chairman Jerome Powell will deliver a speech on the economic outlook at the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon.
The renewed selling pressure surrounding the US Dollar and escalating geopolitical tensions on news of Russian forces taking control of the settlement of Kalynivske, in Ukraine's Dnipropetrovsk region, allow XAU/USD to extend its rally. At the time of press, Gold was trading at around $3,755.
The USD Index lost more than 0.3% on Monday and erased a small portion of the gains it recorded in the second half of the previous week. In the absence of high-tier data releases, mixed comments from Fed officials made it difficult for the USD to stay resilient against its rivals. Additionally, the bullish opening in Wall Street put additional weight on the currency's shoulders. Early Tuesday, the USD Index moves sideways below 97.50, while US stock index futures trade flat. S&P Global Composite PMI is forecast to show an ongoing expansion in the private sector's economic activity at a healthy pace in early September.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.31% | -0.10% | 0.42% | 0.20% | 0.34% | -0.17% | |
| EUR | 0.33% | 0.03% | 0.19% | 0.73% | 0.49% | 0.64% | 0.12% | |
| GBP | 0.31% | -0.03% | 0.10% | 0.72% | 0.48% | 0.63% | 0.15% | |
| JPY | 0.10% | -0.19% | -0.10% | 0.51% | 0.28% | 0.44% | -0.06% | |
| CAD | -0.42% | -0.73% | -0.72% | -0.51% | -0.23% | -0.08% | -0.56% | |
| AUD | -0.20% | -0.49% | -0.48% | -0.28% | 0.23% | 0.15% | -0.34% | |
| NZD | -0.34% | -0.64% | -0.63% | -0.44% | 0.08% | -0.15% | -0.52% | |
| CHF | 0.17% | -0.12% | -0.15% | 0.06% | 0.56% | 0.34% | 0.52% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD rose about 0.5% on Monday before entering a consolidation phase at around 1.1800 in the European morning on Tuesday. European Central Bank policymaker Piero Cipollone will participate in a fireside chat at Bloomberg's Future of Finance conference in Frankfurt, Germany.
GBP/USD snapped a three-day losing streak on Monday and stabilized above 1.3500 early Tuesday.
USD/JPY fluctuates in a tight channel below 148.00 in the European session after posting small losses on Monday.
USD/CAD keeps its footing and trades at a fresh weekly high above 1.3830 on Tuesday. Bank of Canada (BoC) Governor Tiff Macklem will speak later in the American session.
The data from Australia showed early Tuesday that the flash September S&P Global Manufacturing PMI and Services PMI declined to 51.6 and 52, respectively. AUD/USD stays under modest bearish pressure and trades below 0.6600.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
