Gold Prices Succumb to Pressure Amid Positive US & China Economic Indicators

GOLD has declined since September 25, currently priced around $1,840 per ounce in today’s Asian trading session.

Over the weekend, China unveiled its Manufacturing PMI data, showcasing an ascent into the growth zone. Notably, the NBS Manufacturing PMI for August registered at 50.2, surpassing the anticipated 50.0 and marking an increase from the prior 49.7. The Non-Manufacturing PMI also escalated to 51.7, outperforming the projected 51.5.

The US Dollar Index (DXY), in meanwhile, remains resilient, illustrating gains in the subsequent trading window, with a spotlight figure hovering at approximately 106.20. Adding vigour to the USD’s resilience is the buoyant US Treasury Yields, with the 10-year bond yield reflecting at 4.61% as of the latest updates, marking a 0.96% surge.

Conversely, the aura for precious metals, primarily GOLD , seems gloomy. The strengthening USD mainly influenced this, after the release of modest economic metrics on Friday. To elucidate, the September US Michigan Consumer Sentiment Index portrayed an uptick to 68.1. Furthermore, while the US Core PCE – Price Index (YoY) for August aligned with forecasts at 3.9%, its MoM counterpart exhibited a modest 0.1%, contrasting with the anticipated steady figure of 0.2%.

Accentuating the USD’s robust stance was the recent legislative move in the US, ensuring an aversion of an imminent government shutdown and securing funds until mid-November.

In the imminent horizon, gold market participants have set their sights on the forthcoming US ISM Manufacturing PMI for September, especially in anticipation of insights from the Fed’s Chair, Jerome Powell.

Gold Technical Outlook

From a technical lens, XAU/USD encountered a staunch resistance at the 34-hour EMA, marked closely to $1,870.00 during the previous Friday’s trading activities. The daily analysis portrays gold in a precipitous descent, distancing itself from the 200-day SMA which resides considerably higher at nearly $1,930.00. Should this trend persevere, XAU/USD might negate its 2023 accomplishments, potentially plummeting to a fresh annual trough around $1,800.00.