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Gold drops as US ISM PMI beat estimates

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Gold prices surrendered gains after the data in the US showed manufacturing PMI indices released by Markit and ISM beat estimates.

    Treasury yields rise

    Gold backed off from daily highs as treasury yields rose after the data releases indicated the manufacturing sector may have bottomed out in February. The 10-yr treasury yield now trades more than three basis points higher on the day at 1.774%.

    Meanwhile, the 2-yr yield is up more than one basis point. Consequently, the yellow metal, which is sensitive to Fed rate hike bets, fell from $1248 to around $1234/Oz level. The USD index strengthened 0.20% as well.

    Gold Technical Levels

    The immediate hurdle is seen at 1248.57 (daily high), above which the gains could be extended to 1253.32 (Feb 24 high). On the other hand, a breakdown of 1212 (23.6% of Dec low-Feb high) could see the prices drift lower to 1200 levels.
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