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Gold price battles $1,900 as U.S. service sector disappoints in October

Anna Golubova

Kitco News

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(Kitco News) Gold edged up slightly as momentum in the service sector disappointed in October, according to the latest data from the Institute of Supply Management (ISM).

The Non-Manufacturing Purchasing Managers Index was at a reading of 56.6% in October, down from September’s 57.8%. The 1.2 percentage-point decrease surprised the markets, with consensus expectations calling for the index to come in at 57.5%.

Readings above 50 are seen as a sign of economic growth – the farther an indicator is above or below 50, the greater or smaller the rate of change.

"This reading represents a fifth straight month of growth for the services sector, which has expanded for all but two of the last 129 months," the report said.

The details of the ISM Non-Manufacturing report revealed that the new orders sub-index was at 58.8% following September’s 61.5%.

Looking at other components, business activity sub-index was at 61.2% following 63% registered in September. The employment index was at 50.1% versus September’s 51.8%. Economists keep a close eye on the latter number as a gauge into the employment situation in the country.

Inflation pressures rose, with the price index coming in at 63.9% in October after September’s reading of 59%.

In an immediate reaction to the latest ISM Non-Manufacturing index, gold prices edged up and rose back above the $1,900 an ounce level. December Comex gold futures were last trading at $1,905.90, down 0.24% on the day. 

Live 24 hours gold chart [Kitco Inc.]

By Anna Golubova

For Kitco News

Contact agolubova@kitco.com
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