Gold continues to display strength, making gains whenever it finds the chance. Yesterday the Gold price XAU jumped $20 and held the gains against the USD, while other assets turned bearish. Today we are seeing another surge as XAU/USD heads for $2,100.

Gold Daily Chart – The 50 SMA Is Broken

Today, with even a slight weakness in the US economic data and the US dollar, we’ve witnessed a significant surge in Gold prices once again. GOLD has climbed 42 to $2085, marking the highest daily close in history. The intraday peak of $2,140 occurred briefly during a surge in early December but quickly reversed course.

Apart from that instance, Gold has never traded above $2085. The recent rally in Gold is notable because it has occurred despite USD strength and increasing Treasury yields, which typically act as headwinds for safe havens such as precious metals. The latest economic numbers do indicate some concern for the US economy, with measures of factory activity and consumer sentiment showing signs of weakness in February.

US Manufacturing and Consumer Sentiment Supporting Gold

Firstly, after looking at the US ISM manufacturing, we see that the US factory activity contracted at a swifter rate during the month of January, with declines observed in orders, production, and employment. This suggests that the manufacturing sector is facing challenges in gaining momentum, which could have broader implications for economic growth.

Additionally, separate data revealed a decline in US consumer sentiment for February, marking the first decrease in three months. Both current and future perceptions of the economy deteriorated, indicating growing concerns among consumers. These signs of a softening economy are reinforcing expectations that the Federal Reserve may need to implement interest rate cuts to support economic stability and stimulate growth.

Gold Live Chart