Gold drop stalls after US ISM data

FXStreet (Mumbai) – The drop in the gold prices appears to have stalled around USD 1134.15 (50% of July low-Oct high) after the US ISM data showed manufacturing activity stagnated in October.

USD resilient

So far, the markets have not reacted negatively to the weak US data. Moreover, the employment index under ISM was the weakest since Aug 2009. Still, the Treasury yields have held up well. The 2-yr yield is up one basis points; largely unchanged after the data. The 10-yr yield has also stayed unchanged after the data; up almost 3 basis points.

Consequently, the USD index has seen no action. Still, the metal has been able to find support around USD 1134 due to weak data. Ahead in the day, the movement in the USD index could offer cues to the metal.

Gold Technical Levels

At USD 1134.35/Oz, the immediate support is seen at 1134.15 (50% of Jul low to Oct high), could push the metal lower to 1130.25 (Oct 5 low). On the higher side, 100-DMA at 1138.70 and 50-DMA 1140.408 would open doors for a rise to 1147.69 (38.2% of Jul low to Oct high).

The drop in the gold prices appears to have stalled around USD 1134.15 (50% of July low-Oct high) after the US ISM data showed manufacturing activity stagnated in October.

(Market News Provided by FXstreet)