Gold Keeps Overnight Gains As Philadelphia Fed Manufacturing Index Drops To Lowest In Nearly 2.5 Years
(Kitco News) - Gold prices edged up after the index for current general activity in the Philadelphia Federal Reserve’s manufacturing business outlook survey dropped to 9.4 – the lowest level since August 2016.
The consensus expectations compiled by news organizations were expecting a reading of somewhere around 15.6.
Gold prices ticked up following the release of the data, with February Comex gold last trading at $1,260.10, up 0.29% on the day. Prior to the publication, February gold was around the same level, keeping majority of the overnight gains following a drop in the U.S. dollar index.
Gold’s price activity this morning is also connected to traders still digesting the Federal Reserve interest rate decision on Wednesday afternoon and the comments from Fed Chairman Jerome Powell, according to Kitco’s senior technical analyst Jim Wyckoff.
“Traders and investors deemed the Fed’s new stance as more dovish than previously, but not dovish enough to stave off what many believe is an impending global economic slowdown. The gold market did not see a big reaction to the Fed news Thursday, but an overall easier U.S. monetary policy is supportive for the metals markets,” Wyckoff said.
The Philadelphia Fed said that general activity indicators were mixed in December.
“The general activity and shipments indicators fell from their readings last month, while the indicators for new orders and employment increased. The firms remained generally optimistic about future growth,” the Philadelphia Fed report said.
The index for new orders increased by five points to 14.5. The shipments index decreased by twelve points to 10.0. The current employment index rose by two points to 18.3 and the index for the average work week fell by six points to 0.5, marking the lowest level in 26 months. On the inflation front, the index for prices paid fell one point to 38.