After soaring past $1,700 an ounce on Tuesday, gold prices steadied as traders considered whether the U.S. Federal Reserve may tone down its hawkish stance post the release of weak economic data.
U.S. manufacturing activity slowed down in September, growing at its slowest pace in nearly two-and-a-half years. The ISM’s manufacturing PMI fell to 50.9, the lowest reading since May 2020.
Job openings, too, dropped by the most in nearly two-and-a-half years in August, which indicated the labor market was beginning to cool as the economy struggles with higher interest rates, reported Reuters.
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What Happened: Bullion had surged nearly 4% in the last two sessions as higher bond yields and risk aversion pushed traders and investors towards the safe-haven yellow metal.
The rise in gold prices is reflected in ETFs’ performances as the SPDR Gold MiniShares Trust GLDM and the abrdn Physical Gold Shares ETF SGOL gained over 4% in the last five days. Spot Gold was last trading at $1,718/ounce in the Asia session.
More employment data set to be released this week may offer clues on the likely tightening trajectory, the report said.
Expert Take: Ed Moya, senior market analyst at OANDA, said in a note that gold’s bottom is in place now that the U.S. is showing clear signs the labor market is softening, reported Bloomberg. As long as non-farm payrolls do not see an “extraordinary strong print”, gold should remain supported and may test the $1,750 an ounce, he said.
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Image and article originally from www.benzinga.com. Read the original article here.