The gold price is under pressure. However, it largely ignores the rise in US PMI data. On the other hand, analysts expect the gold market to see some more selling pressure.
Even though US economic data was positive, gold remained unresponsive
S&P Global Flash US manufacturing PMI data released on Tuesday increased to 50.0 from the revised 49.8 in September. Based on consensus forecasts, economists were expecting relatively unchanged data. The US manufacturing sector entered expansion territory for the first time since April. The service sector PMI value continued to remain in the expansion zone, increasing from 50.1 in September to 50.9. While consensus estimates were that it would drop to 49.9, this data exceeded expectations.
cryptokoin.comAs you follow from , the gold price did not see a significant movement in the initial reaction to positive economic data. However, the precious metal has been under some technical selling pressure as some traders took some profits after rising to $2,000 last week. As expectations grow that the Federal Reserve’s tightening cycle is over, so does activity, says Chris Williamson, chief economist at S&P Global Market Intelligence. In this context, Williamson makes the following statement:
Hopes for a soft landing for the US economy were boosted by the recovery seen in October. The S&P Global PMI survey was among the most optimistic economic indicators in recent months. Therefore, the uptick in US production growth at the beginning of the fourth quarter is good news.
Gold price technical analysis: There is room for upside!
Market analyst Dhwani Mehta evaluates the technical picture of gold after the latest developments. From a short-term technical perspective, nothing seems to change for the gold price. Because it still remains a ‘buy the dip’ trade. The 14-day Relative Strength Index (RSI) indicator is just below the overbought zone. This shows that there is more room to the upside. Additionally, the gold price has seen a relentless rise, starting from its October low of $1,811. After this, it entered this week’s consolidation phase. It is now forming a porous “Bull Flag” formation.
The daily technical setup for the gold price continues to favor bullish traders. Moreover, the nearest resistance currently stands at the $1,980 barrier. Acceptance above this level is required to challenge the July 20 high at $1,988. Gold buyers will then target $1,997 on the way to the $2,000 barrier. This level is the highest point in five months for the gold price. On the other hand, if gold sellers regain control, they will be looking for a sustained breakout of the October 23 low of $1,963. Further south, the psychological $1,950 level will be retested. The line in the sand for gold buyers is at $1,945, the October 19 low.
Gold price forecast: There is still room for extra decline!
According to preliminary data from CME Group, the number of open positions in gold futures markets continued its upward trend on Tuesday. During this period, the position increased by approximately 1.6 thousand contracts. Volume decreased by approximately 9 thousand contracts for the second session in a row.
Gold price finished Tuesday’s session with marginal losses amid an inconclusive price movement. According to market analyst Pablo Piovano, this move was due to increased open interest. This shows that the yellow metal may suffer more losses in the near term. Meanwhile, the bulls continue to target the key hurdle at $2000 per head for now.
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