Summary:

• ISM Manufacturing PMI 57.3 vs 58.4 and 59.3 prior
• Index falls to lowest level since July 2017
• Gold falls below 1306 and threatens to break lower

The latest manufacturing data from the US has followed the lead of the UK in falling further than expected in what is a mildly disappointing data point. The ISM manufacturing PMI for April dipped to 57.3 from 59.3 against consensus forecast for a 58.4 reading, with the number being the lowest for this economic indicator since last July.

 The ISM manufacturing index has fallen in each of the last 2 months but it remains fairly high compared to recent years. Source: xStation calendar

The ISM data can have a notable impact on the market, but it is often not as market moving as Fed decisions and NFP reports. Along these lines, as part of the ISM release there is also a employment index and this fell also, dropping to 54.2 from 57.0 previously. This could be seen to signal some possible weakness in this Friday’s NFP release, which is scheduled to be out at 1:30 PM (BST). 

 Gold is looking to make a major break lower with 1311 an important area to watch on an end-of-day basis and 1303 on an intra-day one. Source: xStation

We earlier noted the strength in the USD seen today, and despite the miss in the ISM the buck remains near its highest levels of the day. The price of Gold is highly sensitive to the USD and it also is ignoring this ISM softening as it falls to its lowest level since February and is not far from breaking below the $1300 level. Looking at the D1 chart, 1311 seems to be significant as an end-of-day level and should the market close tonight below here then the breakout could be seen to be further confirmed. On an intra-day basis 1303-1306 has attracted buyers when price has dipped below 1311 so far this year and a breach of 1303-1306 could also be seen to further support a breakout.