Gold Price Forecast: XAU/USD jumps to one-week highs after US data

• Gold gains momentum after US ISM Manufacturing. 
• XAU/USD extends rebounds from monthly lows, tests $1,930/oz.
• US Dollar erases gains, US yields pullback from weekly highs. 

Following the release of weaker-than-expected US economic data, Gold price jumped to $1,931, reaching the highest level in a week. The weaker data triggered a decline of the US Dollar and boosted Treasury bonds. 

US ISM Manufacturing below expectations

The US ISM Manufacturing PMI dropped from 46.9 to 46.0, falling short of expectations for a modest recovery to 47.2. The Prices Paid Index also fell, declining from 44.2 to 41.8, while Employment dropped from 51.4 to 41.8. 

These numbers indicate ongoing problems in the manufacturing sector and softer price pressures, which weighed on the US dollar. As a result, the DXY fell to 102.75, testing Friday's lows, while the 10-year US bond yield pulled back from 3.86% and bottomed at 3.78%.

Following the report, XAU/USD jumped to $1,931 but failed to hold above $1,930. It is currently hovering around $1,926, up for the second consecutive trading day. 

Gold continues to rebound after falling on Thursday to $1,982, the lowest level since March. While the technical outlook for the yellow metal has improved in the short-term, the bias on the daily chart remains to the downside, and the price remains well below the 20-day Simple Moving Average (SMA) that stands at $1,936.

Technical levels