Well, well, well, it looks like our friend Gold is taking a tumble. Why, you ask? Blame it on the surprisingly positive US S&P Global PMIs, which have boosted the US Dollar and caused the precious metal to take a nosedive. To make matters worse (or better, depending on your perspective), the US Federal Reserve is expected to hike rates by 25 bps at the May meeting, according to the FedWatch Tool.

So how bad is it, you ask? Well, let’s just say that Gold Price has plunged below $2,000 and hit a daily low of $1,971.74. Ouch. Apparently, economic data from the United States (US) showed that the economy continues to expand, despite recent reports flashing a recession. Therefore, XAU/USD is trading at $1,982.78, losses 1.07%, at the time of writing.

According to S&P Global, the final PMI readings for the US surprised most investors, catching them off guard and causing quite the market reaction. The S&P Global Manufacturing PMI was 50.4, above 49 estimates, while the Services rose to 53.7, exceeding the consensus of 51.5. Therefore, the Composite reading was 53.5, above its previous reading.

As a result, XAU/USD spiked to $1,997.95 before tanking toward a two-day low of $1,971.30, $1.5 above the S3 daily pivot point and shy of testing the weekly low of $1,968.80. Meanwhile, US Treasury bond yields climbed, signaling that inflation could rise, with 2s and 10s gaining each three basis points, at 4.184% and 3.564%, respectively.

So what’s next, you ask? Well, according to the CME FedWatch Tool, odds are at 88% for a 25 bps rate hike at the May 2-3 meeting. Hence, the greenback is pairing some of its Thursday’s losses, as shown by the US Dollar Index (DXY), which tracks the buck’s performance vs. six peers, up at 0.14% at 101.936.

Federal Reserve officials have also been making headlines lately. Philadelphia Fed President Patrick Harker suggested the US central bank is close to ending its campaign to control inflation. At the same time, Cleveland’s Loretta Mester believes rates should go above 5% due to high inflation. The current benchmark rate is between 4.75% and 5%.

But let’s get technical for a moment. From a technical perspective, Gold finally broke below the 20-day Exponential Moving Average (EMA) at 1988.01, which could pave the way for further downside. It should be said the 20-day EMA has been dynamic support for Gold buyers, meaning that sellers must keep prices below $1,988. If XAU/USD sellers want to cement their case, a break below the weekly low of $1,969.34 could keep them on the path toward the $1,950 area before testing the 50-day EMA at $1,944.87. Otherwise, XAU’s buyers, once reclaiming $1,990, could pave the way for a retest of $2,000.