XAUUSD Analysis: Improving manufacturing data bearish for XAUUSD

By IFCMarkets

Improving manufacturing data bearish for XAUUSD

Global downturn is easing as governments began to ease the tough coronavirus-led lockdown measures. While factory activity still contracted globally in May, contraction slowed as evidenced by purchasing managers indexes for Europe, US and China. Thus, Markit’s Manufacturing Purchasing Managers’ Index (PMI) for the euro zone rose to 39.4 in May from 33.4 in previous month. The US Institute for Supply Management report showed its manufacturing index rose to 43.1 in May from an 11-year low of 41.5 in April. China’s official manufacturing purchasing managers index and the private Caixin manufacturing purchasing managers index both showed factory activity still expanding in May. And China’s services sector returned to growth last month for the first time since January: the Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 55.0 in May from 44.4 in April, hitting the highest level since late 2010. Readings above 50 indicate growth, below 50 indicate contraction. Improving economic data are bearish for gold prices.

Summary of technical analysis

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