Gold Tumbles as Hawkish Comments Strengthen Case for Further Rate Hikes
Gold prices have been struggling to stabilize after the September break, but recent PMI data and hawkish comments from Federal Reserve officials have pushed gold lower. The services PMI reached a nearly five-year high, while manufacturing numbers were also strong. This has strengthened the case for further rate hikes, with three Fed officials confirming this view.
New York Fed President John Williams said it would be reasonable to expect another rate hike by year-end, following comments from Federal Reserve Governor Michael Barr and Boston Fed President Susan Collins that inflation may stay notably above 2%.
Gold is currently trading below its 50-day moving average at $4,312.07, with resistance at the price cluster formed by the 50-day MA and the 50% level at $4,319.60. The downtrend on the swing chart and break below the 50-day MA have strengthened my downside bias.
The market is currently focused on jobless claims and new home sales due later Thursday, which could challenge the current pricing of a 77.5% chance of another rate hike in October.