Gold Under Pressure as Strong US Data and Rate Hike Boost USD

Gold prices remain under pressure but still off its lows following despite data that points to renewed momentum in the U.S. manufacturing sector.

Wednesday, the Institute for Supply Management said its Purchasing Managers Index pushed further into expansion territory in February, rising to a reading of 57.7%, following January’s reading of 56%.

According to consensus forecasts, economists were expecting to see a modest rise to 56.2%. Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.

Ahead of the report, growing expectations for an interest rate hike in March was pressuring gold but prices are unchanged following the stronger-than-expected report; April gold futures last traded at $1,240 an ounce, down more than 1% on the day.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza