Gold Prices Holding Steady Following Rise In New York Fed Empire State Survey
(Kitco News) - Gold prices are holding firm as the New York manufacturing sector finds some momentum in July, reversing some of last month’s unprecedented weakness
Monday, the New York Federal Reserve said its Empire State manufacturing survey’s general business conditions index increased to a reading of 4.3 in July, up from June’s reading of -8.6. Consensus forecasts were calling for reading of 1.6.
Last month the New York Fed said that June drop into negative territory was its biggest one-month change in its history.
"Manufacturing firms in New York State reported that business activity grew modestly in July," the report said.
The data is having little impact on gold prices, which continue to hold critical support above $1,400 an ounce. August gold futures last traded at $1,415.70 an ounce, up 0.25% on the day.
The better than expected reading in the Empire State survey eases some fears of a severe economic slowdown but also raises some concerns that the Federal Reserve will not cut interest rates aggressively through the rest of the year, according to some economists.
The manufacturing sector has been a source of concern among economists as the ongoing trade war between the U.S. and China weighs on sentiment and potential demand.
Although the latest survey showed a renewed momentum in the headline numbers, the components of the index were not as robust. The report said that new orders index rose to -1.2, up from June’s reading of -12.
At the same time the shipments index dropped to a reading of 7.2, down from June’s reading of 9.7.
The region’s manufacturing labor market also lost momentum last month with the employees index dropping to -9.6, down from June’s reading of 3.5.
The report also noted muted inflation pressures with the prices paid index fall to 25.5, down from June’s reading of 27.8.