. Dollar Soars, Gold Declines in September - Capital Street FX

Dollar Soars, Gold Declines in September – Capital Street FX

Dollar Soars, Gold Declines in September – Capital Street FX

06 Oct 2023

September Jobs Report: Payrolls at 336,000; Gold and US Dollar Take Different Paths.


The latest labor market report for September in the United States has turned heads, as it revealed a remarkable surge in nonfarm payrolls. This unexpected development highlights the resilience of the labor market and its continuing support for the overall economy. This article explores the key findings of the September jobs report, its implications for financial markets, and the potential influence on the Federal Reserve’s future actions.

A Surprising Job Surge

In September, the United States added an impressive 336,000 jobs, far surpassing the anticipated figure of 170,000 new jobs. This positive trend builds on the revised figures for August, which showed a gain of 227,000 jobs. Despite these gains, the unemployment rate held steady at 3.8%, signaling an enduring gap between labor supply and demand.

Impact on Financial Markets

The robust performance in the labor market had an immediate impact on the financial landscape. The U.S. dollar, measured by the DXY index, continued its upward trajectory following the release of the jobs report. This surge was primarily driven by a simultaneous increase in U.S. Treasury yields, reflecting growing optimism about the nation’s economy.

Gold’s Response

In contrast to the U.S. dollar’s gains, the price of gold experienced a decline due to shifting economic dynamics. Rising interest rates, combined with changes in the foreign exchange market, exerted downward pressure on gold prices.

Federal Reserve’s Deliberations

Federal Reserve policymakers have been contemplating the possibility of further monetary tightening later this year. While no firm decision has been reached, the robust results from the September nonfarm payrolls report could sway policymakers towards additional tightening in 2023. This scenario may keep yields and the U.S. dollar on a path of further gains, potentially putting more downward pressure on gold.


The September labor market report in the United States has defied expectations with a substantial increase in nonfarm payrolls. This surprising strength has far-reaching implications, not only for the labor market but also for financial markets, as it influences the direction of the U.S. dollar and the price of gold. The Federal Reserve’s future actions will be closely monitored, as they will play a pivotal role in shaping the economic landscape moving forward.