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Gold Prices Slip After US Manufacturing ISM PMI Report

by Didimax Team

The Spot gold prices fell by 0.1% to $1,987.49 per ounce. Meanwhile, the gold futures prices fell by 0.2% to $1,996.10 in Monday (01/May) evening trading session. 

The XAU/USD chart based on a release shows gold prices trading at $1,981.05, trending flat since April 24. That is why; market participants have to prepare their strategies. 

The latest united states Manufacturing ISM PMI data, which was better than expected, sparked expectations of a Fed rate hike whose policy will be decided this week. 

The US manufacturing activity in April was still in the contraction category at 47.1. However, that was up from the previous number at 46.3 and higher than expectations of 46.8. 


Stronger Data Hits the Gold Commodity 

Data that supports the increase in interest rates, will tend to pressure gold prices as well. Nevertheless, the market looks wait-and-see looking forward to further information and developments. 

Jim Wyckoff, analyst from Kitco, said that the stronger-than-expected data hit the precious metals market. On the contrary, it gave a slight strengthening to the US Dollar.

At the opening of yesterday's trading session, gold prices briefly touched a high level of $2,005. It was following news from the stock market that JPMorgan Chase & Co.

Based on a rumor, that company will buy most of First Republic Bank's assets seized by the American banking regulators. However, the rise in gold prices was short-lived and fell again some time after the market turmoil subsided. 

The Fed’s Policy will be Announced on Thursday 

The move in gold prices is clearly premature. The analysts use some of those opportunities to try and take advantage of opportunities from rising positions.

That was commented by Phillip Streible, an analyst at Blue Line Futures. This week, the market will focus on the FOMC Meeting which will start on Tuesday and Wednesday. 

The Fed's policy will be announced in the early hours of Thursday. Most of the market participants expect a 25 basis point rate hike. That is why; the final result is awaited. 

In addition, Fed Chairman Jerome Powell's statement in the post-meeting press conference will also be watched for clues. That is whether the Fed's interest rates will be cut or not. 

Meanwhile, EURO CPI is Released 2 Times

As is known, the US banks collapsed due to overvalued interest rates and the threat of recession still lurks this year. Elsewhere, the Euro area CPI is released 2 times a month, namely Flash (preliminary data) and final. 

This inflation rate estimate figure is released by Eurostat based on input from preliminary CPI data from 19 Euro area member countries. There may be a lack of details about the category of goods as a reference.

However, the Flash Estimate will have a high impact because it is the earliest Euro area CPI data released. The high-impact data is annual inflation.

It is the percentage change compared to the same month in the previous year. There are 2 releases that are awaited by people such as the Core CPI and Total CPI.

EUR/CHF is Weakening 

If observed from the 1-day time frame, the price of the EUR/CHF currency pair is currently in a downtrend. This can be seen from the Death Cross between Mid BB and EMA-50.

That data was just formed a few weeks ago. The price position itself is currently between the two lines. This indicates that the strength of short-term price movements is in a consolidation period or sideways. 

In terms of Setup structure and price behavior, it can be seen that the price has just formed a Strong Buy Direction Candlestick last Thursday. The formation of CSAK Buy itself began with a price decline that was unable to form momentum around Low BB.



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