The PMI Manufacturing data for New York, released tonight at 20:30 WIB, reported a figure of 5.7, significantly exceeding the Trading Central forecast of 2 and showing a considerable improvement from the previous level of -12.6. This increase reflects a recovering manufacturing sector in the United States, indicating a stronger economic activity than previously anticipated. Such data sends a positive signal to investors that the U.S. economy remains robust despite ongoing global uncertainties.
The strengthening of the manufacturing sector reinforces the expectation that the Federal Reserve may maintain its strict monetary policy for a longer duration to ensure inflation is kept in check. With the economy demonstrating resilience, the U.S. central bank has more leeway to avoid cutting interest rates immediately, which was previously anticipated for mid-year.
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The hawkish stance of the Federal Reserve is likely to support a stronger U.S. dollar, which in turn could pressure gold prices. Precious metals typically weaken when the dollar gains strength, as it becomes more expensive for investors using other currencies.
The effect of this data release was promptly observed in the markets, with gold dropping to the level of 2,915 following the announcement. Additionally, the GBP/USD and EUR/USD currency pairs experienced significant selling pressure, with GBP/USD falling to 1.2589 and EUR/USD testing support at 1.0445.
