Gold Prices Fall To Session Lows Following Surging Momentum In Philly Fed Survey
The index for current general activity in the Philly Fed business outlook survey jumped to 25.7, up from 19.9 in June. The consensus expectations compiled by various news organizations were for a reading around 21.6.
Readings above zero in diffusion indexes such as the Philadelphia Fed survey show economic expansion.
"All the broad indicators remained positive, with the general activity and new orders indexes improving this month," the report said.
Gold was already weak going into the New York trading session due to overnight strength in the U.S. dollar. August gold futures continued to trade near fresh 12-month lows at $1,211.6 an ounce, down more than 1% on the day.
Looking at the components of the report, new orders saw a significant jump, increasing to a reading of 31.4, up from June’s reading of 17.9.
However, there was some weakness in the sector, particularly within the labor market. The report said that the number of employees index dropped to 16.8, down from June’s reading of 30.4.
There was also some good news for gold investors as the report noted rising inflation pressures. The prices paid index jumped to 62.9, up from the previous level of 51.8.
Manufacturing production is expected to remain strong through the summer, which is traditionally a slow period. In the survey’s special question firms were asked if they were scheduling plant shutdowns this summer.
“Over 19 percent indicated that such slowdowns were scheduled this summer, down from 26 percent when the question was asked last year,” the report said.