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Gold prices remain under pressure following weaker-than-expected Philly Fed manufacturing survey

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(Kitco News) - The gold market continues to see some technical selling pressure, finding little traction as sentiment in the manufacturing sector remains extremely negative, according to the Philadelphia Federal Reserve.

The Philly Fed said that its manufacturing business outlook showed a reading of negative 43.1 in May up from April’s negative reading of 56.6. However, the data missed expectations as consensus forecasts were calling for a reading negative 40.

Last month the report showed that sentiment dropped to its lowest level in 40 years. Although conditions have improved from those lows, the central banks notes that sentiment is still extremely negative.

“Responses to the May Manufacturing Business Outlook Survey suggest a continued weakening in manufacturing activity this month. The indicators for current activity, new orders, shipments, and employment increased from their long-term low readings in April but remained negative,” the report said.

Economic data has had little impact on gold as investor sentiment has been driving price action. Earlier this week gold prices pushed back to within striking distance of $1,800 but those gains have slowly eroded. In initial reaction to the latest data, June gold futures last traded at $1,741.80 an ounce, down 0.59% on the day.

Looking at some of the components of the report, the new orders index showed a negative reading of 25.7, up from April’s all-time low of 70.90. Meanwhile, the employment index showed a negative 15.3 reading, up from April’s negative 46.7 level.

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