Gold price pressured today on profit-taking and on hopes that recovery will be faster than anticipated as more and more businesses reopen across the globe. Risk on sentiment prevailed yesterday, and Wall Street ended with hefty gains on hopes for more stimulus from the central banks.
Positive news earlier today from European PMI’s might put further pressure on the precious metal. European Monetary Union Manufacturing PMI came in at 39.5 toping the forecasts of 38 in May. The Services PMI came in at 28.7 also above the forecasts of 25 while the PMI Composite came in at 30.5 above the expectations of 24 in May. The France Manufacturing and Services PMI’s also beat the expectations.
On the other hand, losses were capped by weak economic data; the Germany Manufacturing PMI came in at 36.8 below the expectations of 39.2 in May. The PMI Composite below registered at 31.4 below the consensus of 34.1. However, the Services PMI came in at 31.4, topping the consensus expectations of 26.6.
In the USA yesterday, the MBA Mortgage Applications came down to -2.6% for May 15, the previous reading was at 0.3%. Yesterday, the U.S. housing starts and building permits dropped in April to the lowest levels since 2015. The Housing Starts came down -30.2% in April. The Building Permits Change came down to -20.8% in April from -6.8% in March.
The gold to silver ratio gains momentum today adding 1.13% at 100.75 rebounding from three-month lows.
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Gold Price Technical Levels
Gold price is 0.83% lower at 1,732.81 close to daily low as the selling pressure accelerated after better than expected European PMI’s. At nine-year highs, a sharp correction does not surprise. The technical picture remains bullish for gold, and only a close below the 1,700 mark can cancel that momentum.
On the downside, immediate support for gold price stands at 1,731, while more buying interest should emerge at 1,724 the low from May 19 trading session. In case the selling pressure continues then the next support stands at 1,710 the low from May 14.
On the contrary, first resistance stands at 1,748 the daily high. If the gold price breaks above 1,748, then the next hurdle would be met at 1,754 the high from yesterday’s trading session. The next supply zone will be met at 1,765 the nine-year highs.