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Gold prices in striking distance of $1,600 despite strong rise in New York Fed survey

Kitco News

(Kitco News) - Gold prices are holding on to gains, pushing close to $1,600 an ounce even as sentiment in the New York manufacturing sector improves significantly in February.

Tuesday the New York Federal Reserve said that its Empire State manufacturing survey’s general business conditions index rose to a reading of 12.9 in February, up from January’s reading of 4.8. The report solidly beat expectations as consensus forecasts were calling for a rise to 5.8.

This is the highest reading in the Empire State survey since May 2019. "Manufacturing firms in New York State reported that business activity grew at a faster pace than in recent months," the report said.

However, the gold market is ignoring economic data as investors focus on the growing uncertainty surrounding the spread of the coronavirus and its impact on the global economy. Weaker equity markets around the world is creating a safe-haven bid in the yellow metal. April gold futures last traded at $1,592.60 an ounce, up 0.38% on the day.

Looking at the components of the latest report, the New York Federal Reserve said that the new orders index climbed to 22.1, up from January’s reading of 6.6. Meanwhile shipments increased to 18.9, up from the previous reading of 8.6.

However, it was not all good news in the report. The region’s labor market appears to be losing momentum. The number of employees index dropped to a reading of 6.6, down from December’s level of 9.0.

The report also noted muted inflation pressures. The prices paid index dropped to 25.0, down from the previous reading of 31.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.