Article by: ETO Markets
The sluggish U.S. ISM Manufacturing PMI data reflects a slowdown in U.S. business activity, strengthening expectations for a Federal Reserve rate cut. Two consecutive months of contraction have led to a decline in U.S. Treasury yields, with the 10-year Treasury yield falling by 11 basis points, and the dollar index also dropping to 104. Consequently, gold prices turned from a decline to a rise yesterday.
On the geopolitical front, Hamas agreed to the ceasefire proposal put forth by the Biden administration, but Israeli Prime Minister Netanyahu appears to disagree and has emphasized the conditions for ending the war. Any further conflict could lead to a surge in gold prices.
Gold prices have stabilized around $... If they can break through the resistance of the 20-day Simple Moving Average (SMA-20) at $…, it could attract bullish traders and push the price up to the intermediate level of $…, followed by a potential breakthrough to $… and a challenge to the historical peak set in May. Conversely, the 50-day Simple Moving Average (SMA-50) at $… is providing new support for gold prices, followed by the overnight swing low of the $… region. A convincing break below this level could give bearish traders the momentum to challenge the May low of $...
