Gold prices finally marked three consecutive uprises amid retracement in dollar prices. The prices of Spot Gold surged from the level of US$ 1272.90 (Day’s low on 23rd May) to the present high of US$ 1287.45 (as on 27th May 2019 AEST 8:32 PM).
The poor economic figures from the United States and China, primarily raised the concerns of re-escalated trade war between the two most significant economies of the world, which in turn, brought the investors and speculators back to gold for the hedging.
As per the data, The Conference Board Inc Leading Index in China plunged from the level of 1.1% to the level of 0.8% for April 2019. The decline in leading index denoted the slowdown of Chinese economic conditions, which in turn, supported the gold prices in the global market.
Apart from the poor economic outcome in China, manufacturing activities in the United States also took a hit. The Flash Manufacturing Index in the United Index nose-dived to the level of 50.6 for May 2019, against the market expectation of 53.0 as compared to the previous level of 52.6.
The drop in the manufacturing activities exerted pressure on dollar prices, further providing cushion to the gold; however, the figure value of the index remained above the level of 50.0, which in turn, prevented any significant drop in the dollar prices.
On the falling counter, the service index in the United States also fell. The Flash service Index dropped to the level of 50.9 in May 2019, as compared to the market expectation of 53.6; however, the value of the service index remained above the level of 50.0, which in turn, prevented any sharp gain in gold prices.
The goods order and new home sales also plunged in the United States. As per the data, the New Home Sales figure stood at 673K for April 2019, against the level of 723k previously. Further, The Core Durable Index, which excludes transportation items, for April stood at 0.0% against 0.3% in the previous corresponding period.
The Dollar Index dropped from the level of 98.37 (Day’s high on 23rd May 2019) to the level of 97.55 (Day’s low on 24th May 2019).
The fall in US dollar appreciated the Australian dollar, and the prices of AUD/USD soared from the level of US$ 0.6864 (Day’s low on 23rd May 2019) to the present high of US$ 0.6939 (as on 27th May 2019 AEST 8:53 PM).
The appreciation in the Australian dollar kept the AUD-denominated gold prices on a check, and the prices remained well capped below the level of A$ 1868.63 (Day’s high on 23rd May 2019). The prices plunged on 24th April to mark a low of A$ 1851.36. However, it recovered slightly and is currently hovering at A$ 1857 (AEST 8:55 PM).
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