Gold Prices Stuck in Sideways Trend Under Interest Rate Pressure
Gold prices have been stuck in a sideways pattern for several sessions, supported by the weakening US dollar and falling oil prices. However, the precious metal is facing pressure from strong US manufacturing data, which has boosted interest rates.
The US Institute for Supply Management reported that the manufacturing sector's purchasing managers' index in July reached 55.6 points, up from 53.3 points in June. This is the highest level since May 2022 and marks the seventh consecutive month of manufacturing activity expanding.
Stronger-than-expected data may lead the US Federal Reserve to continue prioritizing inflation control, which would be detrimental for gold prices. High interest rates increase the opportunity cost of holding non-yielding assets like gold.