Gold Inches Up as US Manufacturing PMI Disappoints, Fed in Focus

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The Gold price (XAU/USD) bounced back slightly above $2,300 on Wednesday, reacting to a weaker-than-expected US Manufacturing PMI report.

  • Manufacturing PMI Disappoints: The ISM Manufacturing PMI fell below 50.0 to 49.2, indicating a contraction in the manufacturing sector. This data point could suggest a potential slowdown in the US economy.
  • Gold Gains Modest: Despite the weak PMI data, the impact on Gold was somewhat muted due to continued expectations of the Fed maintaining high interest rates.
  • Treasury Yields Dip: The 10-year US Treasury yield dipped slightly, potentially making Gold a more attractive hedge against inflation.
  • US Dollar Weakens: The US Dollar Index (DXY) retreated from a two-week high, providing some support for Gold prices (as they typically have an inverse relationship).
  • Fed Decision Still Looms Large: Market focus remains on the upcoming Fed policy decision, with investors uncertain about the future direction of interest rates. Upbeat ADP jobs data adds to the complexity.

Technical Analysis: Bearish Bias Persists

  • Despite the recent uptick, the technical outlook for Gold remains somewhat bearish.
  • Gold is currently trading below its 20-period EMA, indicating short-term selling pressure.
  • Key support levels to watch include the March 23rd high of $2,223.

Overall, the future direction of Gold hinges on the outcome of the Fed meeting and its impact on interest rates.


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