Gold prices receded on Friday as strong US PMI figures provided support to the dollar. The precious metal went down by 1.2 percent in the spot market at the time of writing to trade at $2,331. Similarly, the price fell in the futures market, trading at $2,344 per ounce after going down by 1 percent. With that move, gold is on course to flat-line this week, after reversing last week’s gains of 1.6 percent.
The US dollar started on a weak footing on Friday, following under-par Initial Jobless Claims and Housing Starts and Building Permits figures released on Thursday. However, the greenback got propulsion fuel on Friday when the US PMI data came out. The S&P Global US Manufacturing PMI came in higher than expected at 51.7 percent versus the forecast 51.0 in June according to the preliminary data. The Services PMI did the same, with the reading at 55.1 against the consensus forecast 53.4 percent. These figures recharged the dollar after last week’s disappointing Retail Sales data triggered concerns that the impact of higher-for-longer interest rates on the US economy could have run deeper than previously thought.
Also, the May figures for Existing Home Sales figures beat forecasts, with the reading at 4.11 million against a forecast figure of 4.04 million. The simmering tension between Israel and Hezbollah provided fuel for safe haven gold on Thursday, with the Lebanese militant group threatening to draw in Cyprus into the conflict should an all-out blown war start. However, there was no exchange reported on Friday, reducing prospects of a fightback by gold price heading into the weekend.
Spot gold price currently has a downward-leaning momentum, and the downside will likely continue if resistance persists at 2,335. In that case, the first support will likely be at 2, 325, but extended control by the sellers could break that mark and send the price lower to test 2310. Alternatively, action above 2,335 will favour the buyers to take control, but they will likely encounter resistance at 2348. A break above that level will strengthen the bullish momentum, and will invalidate the downside narrative. Also, that could see the price rise further to test 2365 in extension.
This post was last modified on %s = human-readable time difference 17:22