Gold find demand after mixed S&P PMIs

The Gold Index is surging to $2000. Following mixed S&P PMIs, the US dollar declined. Increased US interest rates could restrict the precious metal’s growth.

Profiting from mixed S&P PMIs and a declining US dollar, gold is gaining ground on Friday. The pair, which is often known as the price of gold in US dollars, is trading, moving in the direction of $2,000 and gaining 0.30%.

The S&P Global Composite PMI, which remained at 50.7, suggested that economic activity in the US private sector was slightly growing in the first part of November.

On the other hand, the Manufacturing PMI dropped, going from 50.0 to 49.4 during that time, putting it in contraction territory. Conversely, there was a slight improvement in the Services PMI, which increased from 50.6 to 50.8.

Significantly, slow demand and high costs contributed to the US service and manufacturing sectors’ employment decline in November, which was the first such period since mid-2020.

As a reaction, markets seem to be weighing the weakening of the manufacturing sector, boosting dovish bets on the Federal Reserve, which may explain the weakening of the US dollar. However, US Treasury yields are rising and may limit the upside momentum of the yellow metal. The 2-year rate rose to 4.95% while the 5 and 10-year yields to 4.50% and 4.48%.

Considering that the Fed remains data-dependent, the US will report Gross Domestic Product (GDP) revisions from Q3 next week as well as Personal Consumption Expenditures (PCE) figures from October, which will likely impact the USD’s price dynamics.

Evaluating the daily chart, the Relative Strength Index (RSI) is positioned near overbought conditions, manifesting a dominant buying momentum but a potential reversal. In addition, the Moving Average Convergence Divergence (MACD) shows a positive trend with its rising green bars, indicating augmenting bullish momentum.

Contributing to the consolidated bullish narrative is the position of the XAU/USD relative to its Simple Moving Averages (SMAs). Positioned above the 20, 100, and 200-day SMAs, it advances the narrative of bullish control in the broader trend.

Support Levels: $1,970 (20-day SMA),$1,940 (200-day SMA), $1,930 (100-day SMA).

Resistance Levels: $2,015, $2,030, $2,050.