News Bites
Gold Prices Climb As U.S. ISM Manufacturing Index Misses Expectations

(Kitco News) - Gold prices saw an uptick following a miss in the headline manufacturing index from the Institute for Supply Management, which came in 51.2% in July.
Market consensus called for the index to come in at 52% in July following a reading of 51.7% in June.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
The employment index was at 51.7% in July, down from 54.5% in the prior month. The prices index was also down at 45.1% from 47.9%. The index for new orders was at 50.8% after 50.0% reading in June. And the production index was also at 50.8%.
Economists described the data as “not really newsworthy.”
“Overall, a touch supportive for fixed income markets, but not really that newsworthy given the lack of growth we've been seeing in the U.S. industrial sector in recent months,” said CIBC Capital Markets chief economist Avery Shenfeld. “The ISM had been running a bit hotter than various regional indexes, so this merely brings it into line with those measures.”
Following the release, gold prices edged up with the December Comex gold futures last trading at $1,421.90, down 1.11% on the day.
Gold sold off on Wednesday following a less dovish than anticipated Federal Reserve rate cut of 25 basis points.
“While the FOMC statement suggested the door is opened to more interest rate reductions in the months ahead, [Fed Chair] Powell took the marketplace aback when he said the Fed is not planning a long series of U.S. interest rate reductions. He added that this week’s interest rate cut was a ‘mid-cycle’ adjustment. That spooked the metals, and stock and financial markets. The U.S. dollar index rallied solidly to a new high for the year and is seeing follow-through upside action today,” Kitco’s senior technical analyst said on Thursday.