Gold Sticks To Consolidation Mode As U.S. Factory Orders Disappoint
(Kitco News) - Gold remained lower on the day after the Commerce Department reported that U.S. factory orders declined 0.6% to $499.2 billion in November, after registering the biggest drop in more than a year in October.
April Comex gold futures were last trading at $1,316.50, down 0.42% on the day.
Consensus expectations compiled by various news organizations called for orders to be up by around 0.3%.
In October, orders tumbled 2.1%, signaling a slowdown in the U.S. manufacturing sector.
November’s shipments were also down for the second month in a row, dropping 0.6%, while unfilled orders declined 0.1%.
The overall weakness in factory orders was led by lower demand for machinery and electrical equipment, the report specified.
A non-reaction in gold prices is not surprising, as the yellow metal is in need of consolidation, Kitco’s global trading director Peter Hug wrote in his latest post.
“The surge higher after the Fed meeting was a bit aggressive and primarily driven by shorts capitulating,” Hug said. “A sideways consolidation pattern would be healthy for the market and the Chinese New Year holidays will decrease demand this week … We see a $1,305 - $1,325 range this week.”