Gold Price Forecast: XAU/USD hits fresh weekly highs near $1,980 after US data
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- XAU/USD accelerated to the upside after ULC and ISM PMI.
- US Dollar corrects further lower on Thursday.
Gold prices are risen for the third consecutive day as US Treasury yields continue to decline. XAU/USD pair recently jumped to $1,977, hitting a one-week high following the release of the US ISM Manufacturing PMI.
Gold turns positive on Thursday after US data
During the European session, the value of an ounce bottomed at $1,952, the weakest level in two days. It then started to recover and gained momentum, reaching levels above $1,970 following the release of US economic reports.
The ADP Employment report showed an increase in private payrolls by 278K, surpassing expectations of 174K. The US dollar initially rose briefly after the ADP, but then weakened again after the Bureau of Labor Statistics announced a revision of Q1 Unit Labor Costs (ULC) from 6.2% to 4.2%.
The dollar's decline accelerated after the May ISM Manufacturing PMI showed a decline in the main index from 47.1 to 46.9, below the market consensus of 47. The Price Paid Index also fell considerably from 53.2 to 44.2, against expectations of 52, while the Employment Index unexpectedly rose from 50.2 to 51.4.
As a result, the Greenback tumbled to fresh daily lows across the board, in line with a decline in Treasury yields. US stocks opened mixed on Wall Street.
Gold continues to move with an upside bias in the short-term, with the next resistance area located around $1,980. A consolidation above this level would set the stage for an extension towards $1,995. On the flip side, a firm break below $1,955 would likely remove the upside bias, adding pressure for a test of $1,946.
