Gold price experiences slight gains in a market bolstered by positive US manufacturing activity reports.
Surge in US Treasury yields following optimistic ISM and S&P Global reports challenges the appeal of non-yielding Gold.
A stronger US Dollar Index curtails Gold's upward trajectory as market participants trim their bets on Fed rate cuts.
Gold price climbed on Monday, but it remained below the all-time high of $2,265. The bright metal is losing some momentum, yet it remains up 0.30% on the day. At the time of writing, XAU/USD exchanges hands at $2,240 after hitting a daily low of $2,228.
Business activity in the United States (US) picked up in March, according to the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) and to S&P Global. The former exceeded estimates and crushed February’s data, while the latter cooled but stood in expansionary territory. This data along with a robust economic outlook in the US could dent the Federal Reserve (Fed) from cutting interest rates.
The ISM Manufacturing PMI expanded for the first time since September 2022. That pushed US Treasury bond yields higher, a headwind for the non-yielding metal. Investors were prompted to take profits in the yellow metal in exchange for US treasuries, which tend to be more appealing amid expectations for higher interest rates.
The US Dollar Index (DXY), which measures the American currency’s value against six others, stood at 104.99 and gained 0.44%, limiting the XAU/USD advance.
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