Gold Prices See Little Reaction To Modest Rise In Flash PMI Data
(Kitco News) - Gold prices were largely unchanged seeing modest selling pressure following stronger-than-expected preliminary data for the U.S. manufacturing and service sector
The flash U.S. manufacturing Purchasing Managers Index for October rose to a reading of 55.9, up from Septemberâ€™s reading of 55.6, research firm IHS Markit said in its latest report. Economists were expecting a modest decline to 55.5.
At the same time, the firmâ€™s service sector PMI rose to 54.7, compared to Septemberâ€™s reading of 53.5. Economists were expecting the index to rise to 54.1.
Monthly reading above 50 points to an expanding sector, while anything below that shows contraction in activity.
Gold price were seeing some modest selling pressure after hitting a three-month high Tuesday and are relatively unchanged in initial reaction to the latest economic data. December gold futures last traded at $1,233.10 an ounce, down 0.30% on the day.
The report noted that positive sentiment in the manufacturing sector has hit a three-month high; meanwhile sentiment in the service sector is at its highest level in two months.
Although the report noted that businesses are still concerned about global demand in the face of escalating trade wars, it also said that domestic demand is a dominant growth factor for both sectors.
“The resilience of the domestic economy in the face of trade worries, and the strong price pressures indicated by the survey data, will add to expectations that the Fed will hike rates again before the end of the year,” said Chris Williamson, chief business economist at IHS Markit. “The flash PMI surveys indicate that the pace of economic growth gained momentum again in October after having been subdued mainly by adverse weather in September. The headline PMI is running at a level broadly consistent with the economy growing at an annualised rate of 2.5%, boding well for another robust quarter of growth.”