Gold falls as Fed rate hike bets lift US Dollar to two-month high

XAU/USD: near-term bearish bias, but dependent on whether hawkish Fed expectations persist. The key pressure is not just the stronger dollar: expectations of further tightening and elevated Treasury yields raise the opportunity cost of holding non-yielding gold. That combination can weigh on gold and support the USD while markets reassess the Fed’s rate path. FXStreet reports the Fed’s latest projections indicated one more hike this year and that yields remained elevated despite lower oil prices.

The move could extend if upcoming US data—particularly the September PMI cited in the report—reinforces the view that growth and inflation remain firm. Conversely, weaker data, easing yields or a reversal in the dollar could reduce that pressure. Geopolitical risks also remain a potential offset if they revive safe-haven demand; lower oil alone may not ease rate concerns while yields stay high.

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US PMI results, Treasury yields, dollar follow-through, Fed commentary and developments around the Middle East. The report identifies $4,304 and $4,250 as near-term support references, and $4,350 as initial resistance; these are technical context, not a directional signal.