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Gold price recovers after a slight pullback as ISM Manufacturing Index surprises on the upside

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(Kitco News) Gold recovered its daily losses after hitting a new all-time high early on Monday as the headline manufacturing index from the Institute for Supply Management rose more than expected in July.

The ISM manufacturing index came in at 54.2% last month, beating market expectations of 53.6%. July’s monthly increase marked a 1.6-percentage-point advance from June’s reading of 52.6%.

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.

Following the release, gold prices began to climb again after seeing some profit-taking following new all-time highs. The December Comex gold futures were last trading at $1,986.80, up 0.05% on the day.

The employment index was at 44.3% in July, up from 42.1% in the prior month. The prices index rose to 53.2% following June’s reading of 51.3%.

The index for new orders jumped to 61.5%, while the production index was up 62.1%. 

“The growth cycle continues for the second straight month after three prior months of COVID-19 disruptions. Demand and consumption continued to drive expansion growth, with inputs remaining at parity with supply and demand. Among the six biggest industry sectors, Food, Beverage & Tobacco Products remains the best-performing industry sector, with Chemical Products, Computer & Electronic Products and Petroleum & Coal Products growing respectably. Transportation Equipment and Fabricated Metal Products continue to contract, but at soft levels,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.

Live 24 hours gold chart [Kitco Inc.]

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