Key Takeaways:
- ISM Manufacturing PMI fell to 53.3 in June, below the 54 consensus
- Spot gold rallied to near $4,100/oz after the weaker-than-expected data
- Data: PMI at 53.3 vs 54 expected | Prior month: 54
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Gold climbs to $4,100/oz after ISM manufacturing PMI misses forecasts
Gold rose to near $4,100/oz on Wednesday after data showed US manufacturing activity expanded at a slower-than-expected pace in June.
The Institute for Supply Management's Manufacturing PMI fell to 53.3 last month from 54 in May, missing the consensus estimate of 54, according to the ISM report released Wednesday.
The reading marks the second consecutive monthly decline after May's 54 — the highest since May 2022. The prices-paid subindex also moderated, suggesting easing input cost pressures for manufacturers.
Weaker manufacturing data could reinforce expectations that the Federal Reserve may adopt a less restrictive policy stance, a scenario that typically supports gold as a non-yielding asset. Gold had fallen to a seven-month low earlier this week before rebounding on the data miss.
Gold's Rebound From Seven-Month Low
Spot gold had dropped to around $3,975/oz earlier in the week, pressured by a strengthening US dollar — the Dollar Index stood at 101.33 — and rising Treasury yields. The metal's recovery above $4,000/oz accelerated after the ISM release, with traders citing the data as a potential inflection point for rate expectations.
Total known global gold ETF holdings rose by 0.03 million ounces to 97.55 million ounces, the first increase after five consecutive days of net outflows, though holdings remain 2.40 million ounces lower year-to-date, according to exchange data.
What's Next for Gold
Investors are now focused on Fed Chair Warsh's remarks at the European Central Bank's annual forum in Sintra, Portugal, as well as the US nonfarm payrolls report due Friday. A soft labor market reading could further boost gold's appeal.
Key support sits at $3,926/oz, followed by $3,865/oz, while resistance at $4,100/oz must be cleared for a sustained upside move, according to Praveen Singh, head of commodities at Mirae Asset ShareKhan. Silver traded at $58.04/oz, down 0.9% on the day.
This article is for informational purposes only and does not constitute investment advice.
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