Home Forex Markets Gold trend: U.S. non-manufacturing PMI shows economic resilience, and gold prices are under pressure

Gold trend: U.S. non-manufacturing PMI shows economic resilience, and gold prices are under pressure

by WOOWinvest
0 comment
Gold trend: U.S. non-manufacturing PMI shows economic resilience, and gold prices are under pressure

The U.S. ISM non-manufacturing PMI unexpectedly rose, driving the dollar and U.S. bond yields to rebound

Gold Fundamental Outlook

On Monday, the U.S. ISM non-manufacturing PMI rose to 56.5 in November from 54.4 in October, unexpectedly higher than the expected 53.1, showing that economic activity in the U.S. service sector is still in the expansion range. After the release of the data, the U.S. dollar and U.S. bond yields rebounded while gold prices fell. The U.S. dollar index closed up 0.75% yesterday, the 2-year U.S. bond yield rose 10 basis points, and gold fell 1.61% under pressure.

The U.S. labor market remains relatively strong and the strong demand side continues to keep the U.S. economy resilient. This has eased concerns that the U.S. economy has entered a deep recession, but it has also increased the difficulty of a rapid decline in U.S. core inflation, which may become an impact on the Fed’s terminal interest rate and interest rate hikes potential factors of duration.

According to the CME Federal Reserve Watch, after the US November non-agricultural report and November ISM non-manufacturing PMI data, the market expects that the probability of the Fed raising interest rates by 50 basis points in December remains at about 80%, which shows that the market is slowing down the Fed. Expectations for the pace of rate hikes have not changed, and gold may not see a sharp decline.

Before the Federal Reserve’s interest rate decision on December 15, the U.S. November PPI annual rate this Friday and the U.S. November CPI data next Tuesday may become the driving factors that trigger changes in market expectations. If the U.S. PPI and CPI fall further, it will continue for gold The rally provides the conditions.

Figure 1 Gold, U.S. dollar index and 2-year U.S. bond yields

Chart source: TradingView

Gold 4-hour chart

Gold trend: U.S. non-manufacturing PMI shows economic resilience, and gold prices are under pressure

Chart source: TradingView

On the 4-hour chart, gold continued its uptrend last week since early November. After breaking through the November 15 high (1,786), it moved further up to the resistance area near the August 10 high (1,807), technical indicators The relative strength index (RSI) and MACD came out of the classic top divergence pattern, showing the exhaustion of bull power, after which gold prices fell sharply.

In the short term, it may continue to decline to the 61.8%/78.6% Fibonacci retracement level (1,757/1,743). If the trend falls below this support, it will pave the way for a further decline to 1734/1729 in the market outlook; on the other hand, if the trend Stabilized and rebounded in this support area, and the market outlook is expected to retest the December 5 high (1,810).

(by Chris Li)

Follow me on Twitter for more communication: @ChrisLi865

The content on this web page is general market commentary only and may not constitute investment advice of any kind (tax, legal, accounting). This article does not constitute a direct investment invitation or recommendation for specific financial products. The content is for reference only. Readers should not rely on the information herein, nor should their actions or omissions be relied upon. We are not responsible for the results of any person’s actions or omissions based on this article. We make no warranties as to the accuracy of the content or suitability of the information provided. This article is not intended to be disseminated within the territory of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for that matter), except as permitted by the applicable laws of the People’s Republic of China.

Copyright statement: Unless it is for browsing the information on this website, or in accordance with the applicable laws or the terms and conditions, without our specific written permission, no one may copy, usurp, upload, link, or publicly demonstrate to a third party in any way , distribute or transmit any information or content on this website. For unauthorized reprinting of infringements, we reserve the right to further pursue the legal responsibility of the relevant actors. If you have business cooperation needs such as marketing, resource exchange, etc., please contact us.

element inside the element. This is probably not what you meant to do! Load your application’s JavaScript bundle inside the element instead.

You may also like

Leave a Comment

Our Mission is to help you make better trading decisions by providing actionable investing content, comprehensive tools, educational resources and assist you in making more money in the stock market.

Latest News


Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2022 – All Right Reserved. Designed and Developed by WOOW Invest

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy