- The dollar hits lows against several rivals after US data.
- Lower-than-expected data triggers drop in Treasury bond yields.
- XAU/USD is favored, picture improves.
The Prayed is rising on Tuesday and climbed to $1868 after the US S&P Global PMI report came in below expectations and triggered a drop in the dollar.
The S&P Global PMI activity report showed weaker-than-expected data in May, according to preliminary figures. The integrated index fell to a four-month low from 56 to 53.8, below the 55.5 market consensus. The data weakened the dollar and raised the demand for Treasury bonds.
The 10-year rate on the US bond fell to 2.73%, while the 30-year rate fell to 2.96%, both at daily lows. This gave gold an extra boost. For its part, the DXY is at new lows since late April below 101.80.
The XAU/USD now faces the next resistance at the $1872 zone and then 1892$. The bullish tone remains intact and it would be expected that it can mark new highs if it continues above $1848.
In the $1850 area, the 20 and 100 moving averages are seen on the 4-hour chart. A sustained drop below would change the very short-term outlook from bullish to neutral or bearish. Before this level there is an intermediate support at $1857. Below $1,848, XAU/USD could extend the pullback to $1,830.
Technical levels
Source: Fx Street
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