Article by: ETO Markets

XAU/USD currently trades around $2,250, as the US Dollar gathered momentum following the release of a much-better-than-anticipated US ISM Manufacturing PMI. The report showed that economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, with the index jumping to 50.3 from 47.8 in February.

Spot gold is correcting extremely overbought conditions in the near term. The 4-hour chart indicates a dramatic retreat by technical indicators, which are headed south nearly vertically but still far above their midlines. Moving averages, meanwhile, are still developing below the present level while having slightly lost their upward velocity. The 20-SMA is currently offering dynamic support at $... The resistance awaits around the historical high $...