Gold Weak But Shrugs Off Rise In ISM Manufacturing Survey
(Kitco News) - Gold prices remain under pressure but still off its lows following despite data that points to renewed momentum in the U.S. manufacturing sector.
Wednesday, the Institute for Supply Management said its Purchasing Managers Index pushed further into expansion territory in February, rising to a reading of 57.7%, following January’s reading of 56%.
According to consensus forecasts, economists were expecting to see a modest rise to 56.2%. Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
Ahead of the report, growing expectations for an interest rate hike in March was pressuring gold but prices are unchanged following the stronger-than-expected report; April gold futures last traded at $1,240 an ounce, down more than 1% on the day.
Looking at the components of the index, the new orders index rose to 65.1%, up from January’s reading of 60.4%; at the same time the production index rose to 62.9%, up from the previous reading of 61.4%.
However, the labor market was weaker than expected with the employment index falling to 54.2%, down from January’s reading of 56.1%.
Inflation also remains muted with the prices index falling to 68%, down from the previous reading of 69%.