Correction: Gold Prices Hold Solid Gains As Manufacturing Sentiment Gains In November
Correction: The article mixed the headline increase in ISM manufacturing data with the Index's inflation data. The Data has been fixed and is quoted correctly.
(Kitco News) - Gold prices are holding on to solid gains, but the market is seeing little reaction to stronger-than-expected manufacturing data
Monday, ISM said that its manufacturing index increased to a reading of 59.3% in November, up from October’s reading of 57.7% and beating estimates. Consensus forecasts were calling for a reading of 57.5%.
"US manufacturing activity accelerated in November, reversing most of the dip seen in the prior month," said Katherine Judge, senior economist at CIBC World Markets. "The pickup was driven by broad-based improvement."
Although economic data is having little impact on gold prices, as the market benefits from weakening momentum in the U.S. dollar. February gold futures last traded at $1,236.90 an ounce, up nearly 1% on the day.
While the headline sentiment indictor expanded as a faster pace than expected, inflation remains tame with the ISM manufacturing prices falling to a reading of 60.7%, down from 71.6%. Economists were expecting to see a modest drop to 70.1%.
"Prices pressure continues, but at notably lower levels than in prior periods. The manufacturing community continues to expand, with November adding positively to the three-month rolling PMI average," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.
The components of the report showed broad-based strength. The new orders index increased to 62.1%, up from October’s reading of 57.4%; meanwhile, the production index increased to 60.6%, up from October’s reading of 59.9%.
The labor market also showed positive growth with the employment index increased to 58.4%, up from October’s reading of 56.80%