Empire State Survey Has Little Impact On Gold Prices As Markets Focus On Trade Wars
(Kitco News) - Gold prices remain on the defensive as sentiment in the New York region’s manufacturing sector, according to the latest report from the New York Federal Reserve.
The regional central bank said its Empire State manufacturing survey significantly improved in June, rising to a reading of 25, up from 20.1 in May. Economists were expecting to see a print of 19.1.
Gold prices have fallen below the critically psychological level of $1.300 an ounce but is seeing little reaction to the economic data. August gold futures last traded at $1,297.40 an ounce, down 0.83% on the day.
According to some economists, economic data is not having a significant impact on markets Friday morning as attention is focused on a growing trade war between China and the US. Early in the morning, the Trump Administration approved $50 billion in new tariffs on Chinese imports. It is expected that China will again retaliate with its own tariffs on U.S. imports, with agriculture products in the crosshairs.
Jim Wyckoff, senior technical analyst at Kitco.com also noted that a stronger U.S. dollar is weighing on gold prices ahead of the weekend as investors and traders continue to digest Thursday's dovish monetary policy meeting.
Some economists have noted that the latest economic data could continue to support the U.S. dollar, further pressuring gold prices. The components showed solid improvement in the New York manufacturing. The New Orders Index increased to a reading of 21.3, up from May’s reading of 16.
At the same time, the Shipments Index increased to 23.5, up from the previous reading of 19.1.
The labor market also showed strong gains with the Number of Employees Index increasing to 19, up from May’s reading of 8.7.
Another negative for gold is muted inflation pressures. The Prices Paid Index dropped to 52.7, down from May’s reading of 54