Gold Tumbles Below 50-Day Average Amid Hawkish Fed Chatter and Strong US Data

Gold prices have taken a hit due to strong US business activity data and hawkish comments from Federal Reserve officials, falling below its 50-day moving average. The S&P Global Composite Purchasing Managers' Index for the United States jumped to 58.4 in September, reflecting the sharpest acceleration in American business activity in years.

The gains were broad-based, spanning both services and manufacturing, and came alongside solid hiring growth. This unexpected vigor in the world's largest economy has cooled hopes in financial markets for monetary easing, making bullion more expensive for overseas buyers and eroding its appeal due to climbing bond yields.

Fed officials have been reinforcing these headwinds, with Chair Kevin Warsh and Richmond Fed President Thomas Barkin stressing that inflation risks remain alive and additional tightening could be needed. Futures markets are now assigning a better-than-50% probability to another rate hike as soon as the October meeting, with odds of a further move pegged at roughly 90% for December.