Gold prices fell on Wednesday as the U.S. dollar stayed firm amid bets the Federal Reserve will announce another interest rate hike this year.
Stronger-than-expected PMI data and hawkish remarks from Federal Reserve officials, including Kevin Warsh, bolstered demand for the U.S. dollar. Concerns over Strait of Hormuz reopening and ongoing trade tensions also contributed to the greenback’s advance.
Chicago Fed President Austan Goolsbee warned that supply stocks have grown both more frequent and persistent in recent months, suggesting the Fed can no longer dismiss them as transitory factors, signaling potential further tightening.
St. Louis Fed President Alberto Musalem warned that additional rate hikes may be necessary to combat inflation driven by strong demand and commodity price shocks.
Richmond Fed President Tom Barkin and Boston Fed President Susan Collins reiterated that inflation risks currently supersede employment concerns.
The U.S. dollar index rose to 101.23, though it later eased to 101.07, still holding nearly 0.5% gains from the previous close.
Gold futures for September delivery settled down $57.60, or approximately 1.3%, at $4,281.30 per ounce.
Silver futures for December trading slipped $1.455, or 2.2%, to $65.075 per ounce.
S&P Global data revealed the U.S. flash composite PMI climbed to 58.4 in September from 56.0 in August, signaling the strongest private-sector expansion since July 2021 and extending a fourth consecutive month of accelerating growth.
The services sector PMI rose to 58.7 in September from 56.5 in August, while manufacturing PMI accelerated to 56.7 from 53.1 a month earlier.
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