South African Rand Slides as Gold Bear Emerges
The South African rand traded around 17.5 per US dollar in the forex market, trading near a two-week low, pressured by declining prices of precious metals, particularly gold.
A weak UK consumer price index reading puts a potential rate cut on the table for the Bank of England (BOE), and gold’s big drop has traders questioning whether the multi-year uptrend is ending.
Gold prices saw their steepest decline in more than 12 years, dropping as much as 6.3% intraday to near $4,000 an ounce.
XAU/USD trades at $4,114 after diving from a daily high of $4,375. The yellow metal is sustaining its biggest drop since August 2020 after hitting a record high of $4,380 on Monday.
FX traders reported that the US dollar is mostly narrowly mixed among the G10 currencies. Sterling is the exception, and it is off about 0.35% after the softer than expected CPI spurred speculation of a rate cut.
Overall, the US dollar performance has been mixed as markets have been driven by quick changes in risk sentiment given the lack of US data. Meanwhile, the US government shutdown continues to delay many key US economic reports.
On the domestic data front, South Africa’s inflation edged higher to 3.4% in September from 3.3% in August, though it was below analysts’ estimates of 3.5%.
#South African Rand Slides as Gold Bear Emerges#
