Gold prices continued to rise on Tuesday as the dollar slid despite a stronger than expected rise. The US dollar continued its downward trend as US yields headed south. This comes despite stronger-than-expected manufacturing data released in the US on Tuesday.
Trade gold with FXTM
Technical analysis
Gold prices rose on Tuesday but broke out of session highs. Support is seen near the 10-day moving average at 1.946. Target support is seen near the 50-day moving average at 1.893. Resistance is seen near the August highs at 2,075. Medium-term momentum is slowing as the MACD histogram prints red with an upward trajectory pointing to consolidation. Short-term momentum has turned positive as Fast Stochastic generated a cross buy signal. The Relative Strength Index has also turned higher, reflecting the slowdown in negative momentum.
Manufacturing increased more than expected
The manufacturing sector in the US is strong and Tuesday’s report from the Institute of Supply Management showed a stronger number than expected. The ISM manufacturing index for August stood at 56.0 in August compared to expectations that it would rise to 54.5 from 54.2 in July. New orders increased to 67.6 in August from 61.5 in July and production increased to 63.3 in August from 62.1 in July. The order book also increased to 54.6 from 51.8 in July, while prices paid rose to 59.5 from 53.2. August’s expansion in manufacturing was on 4th consecutive month of expansion in a row.
