On 2nd December 2024, the weak ISM data may result in a significant rise in the XAU/USD exchange rate. The Institute for Supply Management (ISM) releases its Purchasing Managers’ Index (PMI), which measures the performance of the manufacturing sector in the United States. A weak PMI reading often indicates economic weakness and can lead to a depreciation in the U.S. dollar.
Today’s given signal : https://t.me/calendarsignal/16195
Additionally, the probability of a rate cut by the FED has increased significantly. The Fed’s monetary policy committee, the Federal Open Market Committee (FOMC), is widely expected to reduce its benchmark interest rate at its upcoming meeting on December 11th. The rate cut is aimed at stimulating economic growth in the face of softening economic conditions.
The combination of weak ISM data and the likelihood of a rate cut by the FED has implications for the U.S. dollar and the gold price. The dollar, as the world’s reserve currency, tends to weaken when economic conditions deteriorate and investors seek refuge in alternative assets like gold.
A weaker dollar makes gold, which is priced in U.S. dollars, cheaper for foreign buyers. As a result, the exchange rate between gold and the U.S. Dollar (XAU/USD) is likely to surge in December 2024.
The increase in the XAU/USD exchange rate can be attributed to several factors. Firstly, the weak ISM data suggests that the U.S. economy may be facing difficulties, leading to a decline in demand for the dollar as a safe-haven asset.
Secondly, the likelihood of a rate cut by the FED suggests that interest rates in the United States may decline further. Lower interest rates tend to weaken the U.S. dollar, as investors seek out higher-yielding assets.
Additionally, gold is often seen as a hedge against inflation and uncertainty. With concerns about a potential slowdown in economic growth and the potential for monetary policy easing, investors may increasingly turn to gold as a store of value and protection against inflation.
Previous released data results :
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