Gold Down As USD Buyers Return After Thanksgiving – US Manufacturing Improves
Gold has turned bearish today, making a sharp reversal in the European session, losing around $30 as USD buyers returned after the weekend, following this liquidity last week due to the Thanksgiving holiday.
Gold prices declined by 1% this morning, snapping a four-session rally as the US dollar strengthened. Despite a sharp drop of over 3% in November, gold avoided a deeper slide. Midway through the month, prices tumbled to $2,536 before recovering to close the month higher. Still, November marked the steepest monthly decline since September 2023, driven by fears that Donald Trump’s proposed tariff policies could extend the Federal Reserve’s higher interest rate stance.
Gold Chart H1 – A Head and Shoulders Is Forming
On Saturday, Trump threatened 100% tariffs on BRICS nations if they adopted or supported a currency other than the US dollar. His remarks added momentum to the dollar’s rally today. The dollar index climbed 0.5%, its best showing in over a week, making GOLD more expensive for international buyers. Spot gold edged up slightly, trading at approximately $2,621.86 per ounce, but remains under pressure from the dollar’s strength.
- The November PMI from the Institute for Supply Management
- Overall Index:
- 48.4 points, above the expected 47.5 points (prior: 46.5 points).
- Signals continued contraction but at a slower pace than anticipated.
- Key Sub-Indices:
- Prices Paid: 50.3 points (prior: 54.8 points) – significant easing in input costs.
- New Orders: 50.4 points (prior: 47.1 points) – returned to expansion territory.
- Production: 46.8 points (prior: 46.2 points) – slight improvement but still contracting.
- Employment: 48.1 points (prior: 44.4 points) – improved but remains below expansion levels.
- Supplier Deliveries: 48.7 points (prior: 52.0 points) – shorter delivery times reflecting better supply chain conditions.
- Inventories: 48.1 points (prior: 42.6 points) – significant improvement, though still contracting.
- Backlog of Orders: 41.8 points (prior: 42.3 points) – continued decline in order backlogs.
- New Export Orders: 48.7 points (prior: 45.5 points) – narrowing contraction in export demand.
- Imports: 47.6 points (prior: 48.3 points) – slight further contraction.
- Customers’ Inventories: 48.4 points (prior: 46.8 points) – indicating better inventory levels.
- Market Impact:
- The US dollar gained momentum post-report, reaching the day’s highs as the data pointed to improving manufacturing conditions.
US Manufacturing Survey from S&P Global
- Final PMI: 49.7 points, up from the 48.8 points preliminary estimate (prior: 48.5 points).
- Indicates marginal contraction in manufacturing but shows improvement in the overall sector sentiment.
- Comparison with ISM Data:
- Both reports reflect improvements in manufacturing activity, with ISM highlighting a return to expansion in new orders and easing price pressures.
- S&P Global PMI suggests the sector is edging closer to stabilization as contraction slows
Gold Live Chart
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