Gold hits fresh lows near $1300/oz after US data

• Metal continues under pressure, still above $1300/oz. 
• Price bottomed at $1302 on upbeat US data. 
• Fed’s Powell speaks at Senate Banking Committee. 

Gold continued to move with a bearish bias and bottomed at $1302/oz after the release of the ISM Manufacturing report, the lowest level since January 2, $15 below yesterday’s close. During the last hour, it rebounded but found resistance at $1310. As of writing it was trading at $1308, under February lows and headed toward the lowest close so far this year. 

US data and Powell 

The ISM manufacturing index came in at 60.8% in February above the 59.1% registered in January and on top of the 58.5% expected. It was the highest reading since May 2004. James Knightley, Chief International Economist at ING points out that readings above 60%, in the past has been consistent with 6% real GDP growth.

The greenback peaked after the report and then dropped modestly following the first answers of Jerome Powell to US senators. He said there is no strong evidence of a decisive move up in wages and warned about fiscal policy putting upward pressure on inflation during 2018. It is the second testimony of Powell of the week. On Tuesday,  Fed Chair offered upbeat comments on the US economy, boosting the dollar that sent XAU/USD sharply lower. 

Gold levels 

Today gold resumed the slide and approached the $1300 region that is the immediate key support. Below the next potential supports might lie at $1294 and $1290. On the upside, resistance levels could be seen at $1311 (US session high), $1315 (Feb 28 low) and $1320 (Feb 22 low).