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The Dallas Fed Manufacturing Raw Materials Payments Index for January was 37.1, down from 36 in the previous month.The Dallas Feds manufactured goods price index for January was 18.5, down from 8.2 in the previous month.The Dallas Fed Business Activity Index for January was -1.2, revised from -10.9 to -11.3 in the previous month.U.S. natural gas futures extended their gains, surging 20% to their highest level since December 2022. This surge was driven by news that U.S. natural gas production fell to its lowest level in two years due to wells freezing caused by a sharp drop in temperature.U.S. stocks rose in early trading on Monday as investors weighed new trade and policy risks and a strong start to fourth-quarter corporate earnings. Mining companies Freeport-McMoRan and Newmont were among the best performers as precious metal prices surged. Tom Essaye, founder of Sevens Report, said, “Today’s focus includes the rising risk of a U.S. government shutdown and the threat of tariffs on Canada. Any news that increases the likelihood of a shutdown or that the tariff threat might be implemented will weigh on the market, while a de-escalation will help drive a rebound.” However, investors remain skeptical about the likelihood of Trump implementing the tariff threat. Deutsche Bank noted that equity positions are generally trending sideways, while autonomous positions continue to shift from large-cap growth and technology stocks to cyclical stocks. JPMorgan Chase pointed out that reports so far this earnings season show that growth outside the technology sector is expanding. The main event this week is the Federal Reserve’s interest rate decision, with the market widely expecting no change.

Forecast for Gold Price: XAU/USD consolidates above $2,000 as investors await initial US S&P PMI data

Daniel Rogers

Apr 21, 2023 13:52

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During the Asian session, the price of gold (XAU / USD) is oscillating above the psychological resistance of $2,000.00. After a gradual increase, the price of gold has leveled off near $2,005.00 as investors await the release of preliminary S&P PMI data for the United States.

 

S&P500 futures have added some gains during the Asian session following three consecutive declines. As a result of Elon Musk's price-cutting frenzy, Tesla's revenue projections were gloomy, which dampened market sentiment. Near 101.77, the US Dollar Index (DXY) has extended its correction. The USD Index has been consolidating in a range between 100.90 and 102.03 for the past several trading sessions. Therefore, a move that exceeds the previously specified limit will be considered decisive.

 

The subdued USD index weighs on US Treasury yields as well. The demand for U.S. government bonds has increased as weekly unemployment claims have increased. The number of individuals claiming unemployment benefits rose to 245K, exceeding the consensus estimate of 240K. This indicated a softening in the labor market and bolstered expectations that the Federal Reserve (Fed) will not raise interest rates after the monetary policy meeting in May.

 

In the future, the publication of the preliminary US S&P PMI data will determine the impact of the Fed's rate hikes on the scope of economic activity. According to projections, the Manufacturing PMI and Services PMI will decline to 49.0 and 51.5, respectively. A preliminary PMI reading that is weaker than anticipated could impact heavily on the U.S. dollar.

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