Tonight's ISM Data Could Shake Up Gold!
At the time of writing, the price of gold is hovering around US$4,061–US$4,063 per troy ounce ahead of the US ISM Manufacturing data release tonight at 21:00 WIB. The ISM Manufacturing PMI is projected to rise to 54.0 from 53.3, while the ISM Manufacturing Prices index is expected to fall to 70.0 from 73.0. The official ISM data for July is scheduled for release on Monday at 10:00 New York time.
Fundamentally, these forecasts present mixed signals. A rise in the PMI indicates strengthening US manufacturing activity, potentially supporting the dollar and bond yields, thereby putting pressure on gold. Conversely, a decline in the price index suggests that cost pressures are easing; this could reduce the likelihood of Federal Reserve interest rate hikes, offering support for gold. In June, the PMI stood at 53.3, while the price index remained high at 73.0.
Scenarios for Gold's Reaction
Strongly Bullish: PMI comes in below 54.0 and the price index drops below 70.0. A combination of a slowing economy and easing inflation could weigh on the dollar and yields. Gold could break through the US$4,075–US$4,080 range and subsequently test the US$4,100 level.
Strongly Bearish: PMI exceeds 54.0 and the price index remains above 70.0—particularly if it climbs back past 73.0. Such data would indicate a strong economy but persistent inflation. Expectations for interest rate hikes could rise, pushing gold below US$4,050, with targets at US$4,040–US$4,020.
Mixed Scenario: PMI rises above 54.0, but the price index falls well below 70.0. Gold might dip briefly due to dollar strengthening, but the decline would likely be limited as the market perceives inflationary pressures beginning to subside. Price movement is likely to remain within the US$4,050–US$4,080 range.
Newsmaker Opinion: With a projected strengthening in the PMI and persistently high price indices, gold is vulnerable to a correction or two-way volatility upon the release of the data. The US$4,050 level serves as a critical support point; as long as this level holds, the potential to reach US$4,080 remains, but a decisive break below it could drive the price down to US$4,020. (asd)*
Source: Newsmaker.id
