Gold prices down following renewed positive sentiment in flash U.S. PMI data
(Kitco News) - The gold market is seeing some renewed selling pressure as sentiment in the manufacturing and service sector has pushed higher, beating economist expectations.
Friday, IHS Markit said its flash U.S. manufacturing Purchasing Managers Index for November rose to a reading 52.2, up from October’s reading of 51.3%. Economists were expecting to see a reading of 51.5.
The report said that sentiment in the manufacturing sector has risen to its highest level in seven months.
At the same time, the firm’s service sector PMI reading rose to 51.6, up from the previous reading of 50.6. Economists were forecasting the index to come in at 51.2. Sentiment in the service sector is at a four-month high, the report said.
Any monthly reading above 50 points to an expanding sector, while anything below that shows contraction in activity.
The positive sentiment has impacted gold as prices trading near session lows. December gold futures last traded at $1,465.60 an ounce, up 0.14% on the day.
Chris Williamson, chief business economist at IHS Markit described the upturn in sentiment as welcome news for the economy.
“Output of the combined manufacturing and service sectors rose in November at the fastest rate since July, spurred by improved inflows of new business. Encouragingly, firms took on staff again after two months of headcount reductions, primarily to help deal with rising backlogs of work,” he said.
However, he added that risks still exist.
“Although improving, the picture of current business conditions remains subdued by standards seen over the past decade and the business mood somber in relation to prospects for the year ahead. The latest survey results are indicative of GDP rising at a modest annualized rate of just 1.5%, with payrolls rising at a monthly clip of approximately 100,000,” he said.