Gold Pressuring Dollar Ahead of Manufacturing PMI

New York (July 1)  Gold is steady on Tuesday, as the spot price stands at $1326.49 per ounce in the European session. The metal climbed to $1332.59 earlier in the day, its highest level in 13 weeks. On the release front, today's highlight is ISM Manufacturing PMI, with the markets expecting a strong reading in June.

In the US, the week started out in impressive style, as Pending Home Sales jumped 6.1%, crushing the estimate of 1.4%. This was the strongest gain since May 2013. US housing numbers were excellent last month, as New Home Sales and Existing Home Sales both beat their estimates. The dollar managed to weather a dismal GDP in Q1, so strong numbers this week could give a nice boost to the currency.

Last Friday, Ukraine signed an association agreement with the EU, which strengthens economic and political ties between Ukraine and the EU. Earlier in the year, the decision by the Ukrainian president not to sign the deal led to widespread demonstrations and the installation of a new government in Kiev. Predictably, Russia is upset about the trade deal and has warned about consequences if its economic interests are harmed as a result of the agreement. The situation remains tense in eastern Ukraine, and a flare-up in violence could rattle the markets and affect gold, which tends to gain ground on geopolitical instability.

Source: fxstreet