Gold is trading higher today, along with other precious metals. Precious metals extend upward impulse launched on Friday in response to release of weaker-than-expected manufacturing ISM index for February. Disappointing data release, that showed US manufacturing sector index plunging deeper into contraction territory, triggered a 'dovish' reaction in the markets - a drop on USD market as well as gains on precious metals and equity markets.
The move in gold today is somewhat puzzling, however, as it comes in spite of an uptick in US yields. Fed Chair Powell will appear in US Congress later this week to deliver his semiannual testimonies. It looks like markets are positioning for a dovish message from Fed chief. However, data released since last FOMC meeting suggests that Powell is more likely than not to repeat that there is no rush to cut rates and more confidence in inflation is needed. Having said that, a disappointment and a 'hawkish' reaction to Powell's speeches, even if he does not say anything new, cannot be ruled out.
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Open account Try demo Download mobile app Download mobile appTaking a look at GOLD at D1 interval, we can see that the precious metal recorded the highest close in history on Friday and is testing the $2,100 per ounce mark at press time. GOLD has traded above this hurdle only once, when it spiked at the beginning of December 2023, but has never closed above this area yet.
Source: xStation5
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