News Bites
Gold Holding Gains After Drop In ISM Non-Manufacturing PMI
(Kitco News) - Gold prices are holding steady near their session highs following a drop in momentum in the service sector, according to the latest data from the Institute of Supply Management (ISM).
Monday, the ISM said its Non-manufacturing Purchasing Managers Index showed a reading of 56.9% in May, down from April’s reading of 57.5%. The drop was slightly below expectations as consensus forecasts were calling for a reading of 57.1%.
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.
Ahead of the report, gold prices were hovering just below a six-week high and were relatively unchanged in initial reaction. August Comex gold futures last traded at $1,283.30 an ounce, up 0.24% on the day.
Looking at the components of the report, the business activity index fell to 60.7%, down from April’s reading of 62.4%; at the same time the new orders index fell to 55.7, compared to the previous reading of 63.2%.
However, the report also showed growing momentum in the labor market, but the impact of this component has been significantly reduced because it comes after Friday’s disappointing employment report, which showed 138,000 jobs created last month. The employment index rose to a reading of 57.8%, compared with April’s reading of 51.4%.
Inflation pressures fell last month with the price index showing reading 49.2%, down from April’s reading of 57.6%.
