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Gold falls as stronger US PMI boosts dollar and raises hike expectations

XAU/USD was down 1.7% at about $4,281, after the Composite PMI rose to 58.4 and the dollar hit a fresh two-month high.

Reported · Written up by our desk · Major Pairs

Gold prices moved lower on Wednesday as stronger US activity data fueled expectations of additional Federal Reserve rate hikes, lifting the US dollar.

According to FXStreet, XAU/USD traded around $4,281 during American trading hours, down 1.75% on the day, while the US Dollar Index (DXY) climbed to a fresh two-month high near 101.00.

The dollar extended gains after a preliminary S&P Global Purchasing Managers' Index release showed the Composite PMI rising to 58.4 from 56.0 in August. Manufacturing PMI increased to 57.0, beating the 53.5 forecast, and Services PMI rose to 58.7 versus 56.0.

FXStreet also noted the broader macro backdrop, including recent Fed policy tightening, with the CME FedWatch Tool placing the chance of an October hike at about 53%. The report added that Treasury yields remain elevated, with the 2-year around 4.88% and the 10-year near 5.08%.

Latest closeGold $4,323.20 ▼1.2%|Dollar index 101.16 ▲0.7%

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