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Gold Remains Softer After Philadelphia Fed Manufacturing Index Falls

Kitco News

Editor's Note: Updating earlier story with more details from report.

(Kitco News) - Gold is still on the defensive despite a report showing the headline index for a survey of manufacturers in the Philadelphia area weakened in June.

The index for current general activity in the Philadelphia Fed’s manufacturing business outlook survey retreated to 19.9 from 34.4 in May, the regional bank said. The consensus expectations compiled by various news organizations were for a reading of somewhere around 28 to 29.

Normally softer economic data such as this might help gold on ideas that it means traders could dial back expectations for future U.S. monetary tightening. However, gold was already weak going into the New York trading session due to overnight strength in the U.S. dollar, which hit an 11-month high against the euro.

Shortly after the 8:30 a.m. release of reports on jobless claims and the Philadelphia Fed survey, Comex August gold was trading at $1,265.20, down 0.73% on the day. This was exactly where it was roughly 10 minutes ahead of the data.

Readings above zero in diffusion indexes such as the Philadelphia Fed survey show economic expansion. Thus the headline figure suggests further growth although not as robust as in May.

The index for new orders fell to 17.9 from 40.6 in May. However, the shipments index edged up to 28.7 from 25.8 in May.

Both inflation readings eased modestly. The one for prices received fell to 33.2 from 36.4, while the index for prices paid fell to 51.8 from 52.6.

The index for number of employees changed little, inching up to 30.4 from 30.2. However, the reading for average work week fell to 24.2 from 34.4.

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