Gold Holding Gains Following Disappointing Durable Goods OrdersBy Kitco News
Thursday October 27, 2016 08:49
(Kitco News) -The gold market remain in positive territory and is seeing modest gains, following a weaker than expected reading in U.S. durable goods numbers for September.
Thursday, The Department of Commerce said new order of durable goods dropped by $0.3 billion or 0.1% to $227.3 billion last month, following August’s revised 0.3% increase. According to consensus forecasts, economists were expecting to see no change in the orders last month.
The report noted that this is the first decline after two consecutive positive months
Stripping out the volatile transportation sector, new orders of core durable goods rose 0.2%, in September, following August’s 0.4% decline. Economists were expecting to see an increase of 0.2%
Gold prices are trading near the top of the session's range, and slightly higher from where they were ahead of the report; December Comex gold futures last traded at $1272 an ounce, up 0.42% on the day. Analysts continue to watch the 200-day moving average, which for the December contract now comes in at $1,273.30 an ounce.
Although the report showed broad-based weakness in the manufacturing sector, Avery Shenfeld, senior economist at CIBC World Markets, said the biggest disappointment was the 1.2% drop in business capital spending, non-defense capital goods orders ex-aircraft.
However, he remains optimistic that the drag on U.S. growth will be minimal.
“So business investment looks to be a drag on Q3 growth based on shipments, with orders signaling a return to a positive contribution in Q4,” he said. “Overall, not great, but not enough of a surprise to move markets.”