Gold falls after release of higher-than-expected US PMI data
The post Gold falls after release of higher-than-expected US PMI data appeared on BitcoinEthereumNews.com.
Gold pares earlier gains on Friday following the release of higher-than-expected US PMI data. The data showed US Manufacturing and Services activity remaining strong, suggesting inflation and interest rates will remain higher for longer. XAU/USD’s break above key resistance invalidates the bearish Head-and-Shoulders pattern that formed on the daily chart. Gold (XAU/USD) has reversed earlier gains and broken back below its 50-day Simple Moving Average (SMA) on an intraday basis after the release of US Purchasing Manager Indices (PMI) data from S&P Global showed activity levels remained robust in both sectors in June. Gold sells off after the release of US PMI data which showed the flash S&P Global Manufacturing PMI rising to 51.7 in June from 51.3 in May, whilst Services PMI rose to 55.1 from 48.3 previously. Both results were higher than analysts expected. The data results in Gold dropping off a cliff to trade in the $2,330s on Friday. Higher PMIs indicate inflation will probably remain elevated, resulting in the US Federal Reserve (Fed) having to delay the time when it will be able to cut interest rates – a key determinant of Gold price. Lower interest rates are positive for the yellow metal as they reduce the opportunity cost of holding Gold, which is non-coupon paying, compared to other assets like bonds. Thus any delay in interest-rate cuts weighs on Gold. Gold supported by central-bank buying Gold looks like it will continue benefiting from another factor influencing its price, central bank buying, according to a survey of international central bank reserve managers conducted by the World Gold Council (WGC). The survey’s findings found that 81% of respondents thought central banks would increase their holdings in 2024 – the highest percentage since the survey began in 2019. A large share of the central-bank buying has been by Asian central banks hoarding Gold as a hedge…
Filed under: News - @ June 22, 2024 12:12 am