Gold prices holding above $1,500 following mixed preliminary IHS PMI numbers
(Kitco News) - Gold price are holding on to strong gains following mixed preliminary U.S. manufacturing and service sector sentiment data.
Monday, IHS Markit said its flash U.S. manufacturing Purchasing Managers Index for September rose to a reading 51.0, up from August’s reading of 50.3. Economists were expecting to see relatively unchanged readings.
At the same time, the firm’s service sector PMI reading fell to 50.9, up from August’s reading of 50.7. However, the data was weaker than expected; economists were forecasting the index to come in at 51.5.
Gold prices were in solid positive territory ahead of the report and are only down a tick in initial reaction following the economic data; December gold futures last traded at $1,527.50 an ounce, up 0.82% on the day.
Although sentiment in both the manufacturing and service sector data has picked up this month, the analysts at IHS said that the economy isn’t out of the woods just yet.
“The overall rate of growth in September remained among the weakest since 2016, commensurate with GDP rising in the third quarter at a subdued annualized rate of approximately 1.5%. Prospects also look gloomy, with inflows of new business down to the lowest since 2009 and firms’ expectations of growth over the coming year stuck at one of the most subdued levels since 2012,” said. “Chris Williamson, chief business economist at IHS Markit.
“Key to the recent deterioration has been a further spill-over of the trade-led slowdown in manufacturing to the service sector,” he said. “Inflows of new service sector business almost stalled in September to register the smallest rise since the survey began in 2009. A ray of light comes from manufacturing reporting some easing of headwinds.”