Gold prices continue to struggle even as U.S. manufacturing disappoints
(Kitco News) - The gold market continues to see some selling pressure even as the U.S. manufacturing sector struggles to find momentum.
Friday the Commerce Department said that U.S. durable-goods orders rose by 0.4% in August. The data was worse than expected; consensus expectations compiled by various news organizations called for durables to rise 1.1%
Excluding transportation, core durable goods orders were also weaker than expected, rising 0.4%. Economists were calling for a 1% rise.
The gold market has seen little reaction to the mixed economic data. Spot gold prices on Kitco.com last traded at $1,859.30 an ounce, up 0.55% on the day.
Although the headline data was weaker than expected, Adam Button, chief currency strategist at Forexlive.com noted a critical component in the report core capital goods orders, excluding defense spending and airplane purchases rose 1.8%, up from economist expectations for a 1% increase.
“Don't be fooled by the headline, core orders were strong in August with an upward revision,” he said.
Katherine Judge, senior economist at CIBC said that while core capital durable goods orders is rising at a faster pace than expected, she doesn’t expect this trend to be maintained.
“With less social distancing restrictions remaining to be eased, and the potential for second waves of the virus putting the demand outlook in jeopardy, we expect further growth to occur at a slower pace,” she said.
Looking at the headline data, Judge said that the manufacturing sector still has a ways to go before it gets back to pre-COVID-19 levels.