Global Precious MMI: Gold price falls as dollar gains in September

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The Global Precious Monthly Metals Index (MMI) lost ground this month, dropping by 12.9% as the gold price declined and the dollar strengthened last month.

October 2021 Global Precious MMI

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Gold slides, dollar gains

The U.S. gold bullion price fell in September, dropping from $1,814 per ounce as of Sept. 1 to $1,757 on Oct. 1, a 3.1% drop.

Meanwhile, gold historically correlates inversely with the U.S. dollar. Unsurprisingly, the U.S. dollar showed strength in September.

Last month, the Federal Reserve indicated it could soon finally begin tapering asset purchases, which is supportive for the dollar.

After closing Sept. 1 at 92.45, the U.S. dollar index closed Oct. 1 at 94.03.

Fed could begin tapering

As mentioned, the Federal Reserve last month indicated it could be set to begin tapering asset purchases.

Last December, the Fed said it would “increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month.” That would continue until the Fed deemed “substantial further progress” had been made toward the goals of maximum employment and price stability.

In the Fed’s estimation, progress has been made toward those goals.

“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the Fed said in a Sept. 22 statement. “These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.”

However, the Fed added it will be prepared to adjust its stance on monetary policy if risks emerge that “could impede the attainment of the Committee’s goals.”

Bond yields rise in September

In other indicators, the 30-year treasury yield picked up in September.

After reaching 1.92% on Sept. 1, the rate jumped to 2.04% on Oct. 1. The rate has increased further still since then, hitting 2.10% on Oct. 12.

Meanwhile, the 10-year yield reached 1.31% on Sept. 1 and rose to 1.48% on Oct. 1. The 10-year rate rose to 1.59% on Oct. 12.

Inflation gains

Elsewhere, rising inflation continues to be a lingering concern, for producers and consumers alike.

The Consumer Price Index for All Urban Consumers picked up by 0.4% in September, the Bureau of Labor Statistics reported Wednesday.

Meanwhile, the CPI jumped by 0.3% in August. Over the last 12 months, the CPI rose by 5.4%.

As we’ve noted here in numerous reports, rising energy costs are currently among the biggest concerns for industry and individual consumers. The energy index ticked up by 1.3% in September after a 2.0% rise in August. Meanwhile, the same index jumped by 24.8% over the 12-month period ending in September.

The new vehicles index is up by 8.7% during the 12-month period. Meanwhile, the used cars and trucks index rose by 24.4%.

Actual metals prices and trends

The U.S. gold bullion price fell 3.1% month over month to $1,757 per ounce as of Oct. 1. Meanwhile, the U.S. silver ingot/bars price fell 7.2% to $22.17 per ounce.

The U.S. palladium bars price plunged 23.8% to $1,836 per ounce. The U.S. platinum bars price fell 4.6% to $962 per ounce.

The Chinese gold bullion price fell 4.0% to 363 CNY per gram.

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