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Gold Prices Fall To Session Lows As ISM Manufacturing Jumps Higher In August

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(Kitco News) - The gold market has fallen further from the critical psychological barrier at $1,200 as momentum in the U.S. manufacturing sector continues to pick up, according to data from the Institute of Supply Management (ISM).

Tuesday, the ISM said that its manufacturing index rose to a reading of 61.3% in August, up from July’s reading of 58.1% and missing estimates. Consensus forecasts were calling for a reading of 57.2%.

Readings above 50 are seen as a sign of economic growth; the farther an indicator is above or below 50, the greater or smaller the rate of change.

The gold market has been under pressure for most of the session as the U.S. dollar has pushed higher on rising global trade tensions. December gold futures last traded at $1,196.20 an ounce, down 0.87% on the day. The market is trading near session lows in initial reaction to the latest economic data.

Avery Shenfeld, senior economist at CIBC World Markets, described the latest manufacturing data as “healthy,” which will continue to support the U.S. dollar.

“In sum, you can judge this book by its cover, as what's inside the title page is just as good,” he said.

The gold market has been under pressure for most of the session as the U.S. dollar has pushed higher on rising global trade tensions. December gold futures last traded at $1,196.20 an ounce, down 0.87% on the day. The market is trading near session lows in initial reaction to the latest economic data.

Looking at the components of the report, the New Orders Index increased to 65.1%, up from July’s reading of 60.2%; at the same time the Production Index showed a reading at 63.3%, up from July’s reading of 58.5%.

The manufacturing’s labor market also saw strong momentum growth in August. The Employment Index increased to 58.5%, up from the previous reading of 56.5%.

While growth picked up last month, inflation pressures lost some momentum. The Price Index dropped to reading of 72.1%, down from July’s 73.2%.

However, despite the stronger than expected reading the report did note some growing storm clouds on the horizon.
“Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations,” the report said. “Panelists are actively evaluating how to respond to these business changes, given the uncertainty.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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