Gold Falls Again As Dollar Rises On Rate Hike Bets

(RTTNews) - Gold prices fell on Wednesday as the U.S. dollar stayed firm amid bets the Federal Reserve will announce another hike in interest rate this year.

Strong PMI data and hawkish comments from several Federal Reserve officials including Fed Chair Kevin Warsh pushed up the demand for the greenback. Uncertainty about Strait of Hormuz reopening and trade worries too contributed to dollar's upmove.

Chicago Fed President Austan Goolsbee noted that supply stocks have become more frequent and more persistent in recent times, and the Fed can longer simply "look through" them as transitory factors, hinting at further tightening.

St. Louis Fed President Alberto Musalem said additional rate hikes may be needed to lower inflation resulting from strong demand as well as a commodity price shock.

Richmond Fed President Tom Barkin and Boston Fed President Susan Collins also stressed that inflation risks outweigh employment risks.

The dollar index climbed to 101.23 and despite easing to 101.07, remains nearly 0.5% up from previous close.

Gold futures for September delivery ended down $57.60 or about 1.3% at $4,281.30 an ounce.

Silver futures for December were down $1.455 or 2.2% at $65.075 an ounce a little while ago.

In economic news, data from S&P Global showed the U.S. flash composite PMI rose to 58.4 in September from 56.0 in August, pointing to the strongest expansion in private sector activity since July 2021 and marking a fourth consecutive month of accelerating growth.

The Services sector PMI increased to 58.7 in September from 56.5 in August. Manufacturing PMI accelerated to 56.7 from 53.1 a month earlier.