Piece written by Alexa Smith, Trive Financial Market Analyst 

The Gold Spot Price (XAUUSD) is approaching a seven-month low due to expectations that the Federal Reserve will maintain high-interest rates. The ascent of the Greenback towards an 11-month peak, coupled with Treasury yields hovering near 16-year highs, has been propelled by US macroeconomic data showcasing consistent resilience.  

The S&P Global Manufacturing PMI increased from 47.9 to 49.8 in September, while the ISM Manufacturing PMI increased from 47.6 to 49. These strides showcase additional resilience in the US economy, although the US is still in a contractionary phase. Sentiment is now turning to the US jobs data, which is expected today. Robust employment figures could catalyze a further descent and pave the way for a drop in non-farm payrolls on Friday. 

Technical 

The Gold Spot Price experienced a steep decline after the US Dollar continued to showcase its strength, slipping towards a 7-month low at the $1814.91 per ounce support. A green candle attempted to boost sentiment but fell short due to a hawkish Federal Reserve, which could see a further pullback towards the $1814.91 per ounce support.  

Since selling volume is declining, the Bullion may see a leg up towards the $1881.32 per ounce resistance at the 50% level. However, the 50-day moving average diverging further below the 100-day moving average may support the likelihood of the downtrend continuing.  

Summary 

The Gold Spot Price slipped due to hawkish notes from the Federal Reserve. The Bullion is considered a safe haven in times of uncertainty, but the resilience of the Greenback has seen the price action struggling to establish upside momentum. If downside momentum continues to subdue the price action, the Bullion may look to retest the $1814.91 per ounce support. However, selling volume may promote a pullback towards the $1881.32 per ounce resistance.  

Sources: TradingView, Reuters