Gold continues its upward movement. A local correction at the $1555 level of bit more than 2% or $34, returned the quotes to the middle of the current price channel. A similar correction occurred in mid-August at the level of $1528. As a result, gold price fell to the support level of $1495. At the moment, bulls are testing the $1544 mark against the backdrop of a declining dollar, which is moving down after updating the annual high. The upper limit of the current price channel is $1560, and this price can be seen as the local target for buyers.
The US ISM released its manufacturing PMI on Tuesday. The result was much worse than expected: 49.1 against the forecast of 51.1. This has been the worst result since February 2016. The index has been falling for one year. The local high was recorded last on September 4, 2018. Such a trend contributes to investors’ concerns about a possible recession of the US economy.
The fears are growing in other risky areas. Goldman Sachs raised its estimate for the likelihood Britain will leave the EU without a deal from 20% to 25%, due to the prolonged suspension of parliament. Such sentiments always contribute to the capital flight into gold. One of the most common tools for such investments is purchase of ETF funds’ shares. Last week, an amount of 1.5 billion was invested in the world's largest SPDR Gold Trust, and its official reserves grew by 25 tons. If we take into account the steady demand for metal from the Central Banks of the largest countries in the world, the absolute high at around $1920 per ounce does not seem such a fantastic figure.