Gold price falls following rise in ISM manufacturing sentiment
(Kitco News) - The gold market, briefly slipped into negative territory and is seeing some technical selling pressure as sentiment in the U.S. manufacturing sector improves more than expected in August, according to the latest data from the Institute for Supply Management (ISM).
Tuesday, the ISM said its manufacturing index showed a reading of 56% for August, up from July’s reading of 54.2%. The data were better than expected as economists were expecting to see a relatively unchanged reading at 54.6%, according to consensus forecasts.
According to the report, this is the highest reading in sentiment since November 2018.
The better than expected economic data appears to be weighing on gold in initial reaction. December gold futures last traded at $1,979 an ounce, relatively unchanged on the day.
Not only did the headline numbers beat expectations but the components of the report showed strong growth. The report said that new orders rose to 67.6%, up from July’s reading of 61.5%. This is the highest reading since 2004.
The manufacturing labor market also improved with the employment index rise to 46.4%, up from the previous level of 44.3%.
However, there was some positive for the gold market as the report noted a strong rise in inflation pressures. The prices paid index rose to 59.6%, up from July’s reading of 53.2%.
"Overall the survey still suggests that manufacturing in the US is rebounding a little quicker post-lockdown than we had initially expected," said Andrew Grantham, senior economist a