ISM Manufacturing eases more than expected
Gold prices rebounded on Monday and recaptured the 200-day moving average following a softer than expected US ISM manufacturing report. The move was temperated by a rise in US yields as riskier assets gained traction. The Dollar tumbled to fresh lows for 2020 hitting a 2.5 year low, which paved the way for higher gold prices.
Trade gold with FXTM
Gold prices rebounded on Tuesday after and recaptured the 200-day moving average after falling below this technical level for the first time since March. Short term support is seen near the 200-day moving average at 1,800 and then the July lows at 1,756. Resistance is seen near the 10-day moving average at 1,825. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 18, up from 9, but still below the oversold trigger level of 20, which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a declining trajectory which points to lower prices.
The dollar eased which helped buoy gold following a report from the Institute for Supply Management which said that the manufacturing index fell to 57.5% in November from a 21-month high of 59.3% in the prior month. Expectations had been for the index to decline to 58%. The New Orders Index registered 65.1 percent, down 2.8 percentage points from the October reading of 67.9 percent according to the ISM. The Production Index registered 60.8 percent, a decrease of 2.2 percentage points compared to the October reading of 63 percent.
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.