Gold Extends Recovery After Disappointing U.S. Manufacturing Data
2023.07.03 16:36
Gold prices edged higher to start July, with the US dollar suffering on the back of disappointing manufacturing sector data.
At the time of writing, the spot price, , is trading at the $1,920 zone, 0.10% above its opening price, extending last week’s bounce from three-month lows of sub-$1,900 an ounce.
US markets closed early on Monday and will remain closed on Tuesday in observance of Independence Day. Still, the Institute for Supply Management (ISM) released its sector PMI, which unexpectedly dropped to 46 in June, the lowest level since May 2020, pointing to sustained contraction in the sector.
The weaker-than-expected figures weighed on US and the . Gold peaked at $1,931 an ounce before easing.
After the Fourth of July holiday, attention will turn to Friday’s US nonfarm payrolls report. The economy is expected to have added 200,000 new jobs in June, following the astounding 339,000 hires of May.
From a technical perspective, the XAU/USD pair maintains a short-term negative bias, according to indicators on the daily chart, as the price consolidates below the 20- and 100-day simple moving averages (SMAs), which completed a bearish cross last week.
As so, the 20-day SMA offers immediate resistance at the $1,935 zone, followed by the 100-day SMA at $1,945. A break above the latter would improve the technical outlook, aiming at a retest of the $2,000 level. On the flip side, the next support levels are seen at $1,900 and last week’s low of $1,893.
