FX.co ★ Gold Falls Further as Strong US Data Boosts Dollar

Gold extended its decline to around $4,280 an ounce on Wednesday, pressured by a stronger US dollar after better-than-expected PMI data and hawkish comments from Federal Reserve officials reinforced expectations of tighter monetary policy. The dollar climbed to fresh near two-month highs as data showed US business activity accelerated for a fourth consecutive month in September, reaching its fastest pace in more than five years. Richmond Fed President Tom Barkin noted that higher rates, and the prospect of further increases, could help anchor inflation expectations without significantly slowing economic activity. The Fed raised interest rates last week and signaled that another increase could come before year-end. According to the CME FedWatch Tool, traders are currently pricing in nearly a 60% chance of an additional rate hike in October. On the geopolitical front, President Trump threatened further action against Iran while also suggesting a deal could be reached soon amid renewed diplomatic efforts.