Gold Price Faces Selling Pressure as Fed Hike Bets Rise

The price of gold is facing significant selling pressure despite its recent surge in value. The metal's futures edged higher on Friday but remain on track for a weekly decline due to a strong U.S. dollar and expectations of further Federal Reserve rate hikes aimed at corralling inflation.

Fed Governor Michael Barr, Philadelphia Fed President Anna Paulson, and New York Fed President John Williams reinforced the hawkish drumbeat, indicating that policymakers will likely need to deliver further rate increases to curb persistent inflation.

The Chicago Fed President Austan Goolsbee warned that central bankers must treat the ongoing energy shock as a source of persistent inflation rather than a temporary supply blip. As a result, CME FedWatch data shows traders are now discounting a 70 per cent probability of another quarter-point rate hike at the Fed's October meeting.

The gold futures' price has been testing the key support at $4,293.96 and facing significant selling pressure below the key resistance at the 9 EMA ($4,357) on daily chart. The formation of a 'Bearish Crossover' indicates a surge in selling pressure due to all Exponential Moving Averages (9, 20, 50, and 100) trading below the key resistance at the 100 EMA ($4,477.30).