Gold Market Sees Modest Selling Following Surge In Philly Fed Index
(Kitco News) - The gold market is seeing modest profit taking following strong than expected manufacturing data within the Philadelphia region.
The index for current general activity in the Philadelphia Fed’s manufacturing business outlook survey surged higher in May to a reading of 38.8, up from April’s reading of 22, the regional central bank reported Thursday.
The consensus expectations compiled by various news organizations were for a reading of around 19.9.
" This month, the index recovered some of the declines of the previous two months, but it still remains slightly below its high reading of 43.3 in February," the report said.
In reaction to the data, gold prices are down slightly from their two-week highs hit overnight. June Comex gold futures last traded at $1,260.20 up 0.12% on the day.
The better than expected data should help to calm growing concerns that the U.S. economy was starting to cool. The Philly Fed survey comes two days after the New York Fed reported a sharp contraction in is manufacturing sector. In its latest Empire State Manufacturing survey, the New York Fed said that its index dropped to -1.0, down from April’s reading of 7.2.
Despite the strong headline number, the report showed mixed strength within the manufactuing sector. Looking at the components, the New Orders Index declined slightly to a reading of 25.4, down from April’s reading of 27.4; however, shipments increased to 39.1, up from the previous level of 23.4.
The labor market cooled slight with the Average Number of Employees Index falling to 17.3, down from April’s level of 19.9.
Negative for the gold market is a cooling in inflation pressures. The Prices Paid Index fell to 24.2, compared to April’s reading of 33.7.