Gold Holding Overnight Gains Following Drop In Empire State Manufacturing
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(Kitco News) - Gold prices are relatively unchanged, holding on to their overnight gains following a surprising drop in sentiment in the New York manufacturing sector.
Monday, the New York Federal Reserve said the general business conditions index in its Empire State manufacturing survey fell to a reading of 9.8 in July, following June’s reading of 19.8. Economists were expecting to see a reading of 15.2.
The decline in the New York manufacturing data comes a month after the survey hit its highest point in two years.
Gold prices were solidly higher ahead of the report as markets continued to digest Friday’s weak retail sales numbers and inflation data. The regional manufacturing data has had little impact on the market’s renewed momentum; August gold prices last traded at $1,233.50 an ounce, up 0.49% on the day.
Despite continued growth in the sector, the report noted weaker sentiment across the board. Looking at the components of the report, the New Orders Index dropped to a reading of 13.3, down from the previous level of 18.1; at the same time the Shipments Index dropped to 10.5 from June’s reading of 22.3.
The sector’s labor market is also showing signs of falling momentum. The Number of Employees Index dropped to a reading of 3.9, down from June’s reading of 7.7.
The positive news for gold, which is seen as an inflation hedge, is that price pressures remain steady. The Prices Paid Index rose to 21.3, up from the previous reading of 20.0.