Gold prices moved higher but remain in a tight range as the dollar moved lower. US yields were nearly unchanged despite a stronger than expected ISM manufacturing report. Early ahead of the North American Trading Session, China reported a stronger than expected private manufacturing report that showed that the Chinese economy is now expanding. Gold was also buoyed by tensions between the US and China. China responded by reportedly pausing agricultural imports from the US.
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Gold prices moved higher moving away from support near the 5-day moving average at $1,721, Target support is still an upward sloping trend line that comes in near $1,699. Below that level is support near the 50-day moving average at $1,689. Resistance is seen near the May highs at 1,754. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum is negative but turning neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory that points to consolidation.
Chinese PMI Shows Expansion
China’s Caixin manufacturing PMI beat expectations showing a figure that reflects expansion at 50.7. This compares to the 49.6 reading that was expected. This was the highest reading since January. Caixin’s new export orders component showed continued contraction a 35.3. Over the weekend, the official PMI readings for May came out. Manufacturing declined slightly to 50.6 while non-manufacturing improved to 53.6.
This article was originally posted on FX Empire
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