Gold is holding its own following strong rise in Philly Fed Survey
(Kitco News) - The gold market continues to hold on to strong gains from the start of the week even as U.S. economic data shows some improvement in the new year, according to the latest data from the Philadelphia Federal Reserve.
Thursday, the regional central bank said its manufacturing business outlook rose to a reading of 26.5 in January, up from its December’s reading of 11.1. The data significantly beat expectations as consensus forecasts were calling for a reading around 11.3.
“The survey’s current indicators for general activity, new orders, and shipments increased notably this month and remained positive for the eighth consecutive month,” the report said.
The better-than-expected data is not having much impact on gold prices as the market holds strong gains compared to the start of the week. February gold futures last traded at $1,872.40 an ounce, up 0.12% on the day.
The components of the report showed broad-based strength in the region’s manufacturing sector. The New Orders Index rose to a reading of 30.0, up from December’s level of 1.9.
The Labor market also showed strong growth in the new year. The Employment Index rose to 22.5, up from December’s reading of 5.6%.
While manufacturing sector is improving, it is not without rising costs which is good for gold prices. Looking at inflation pressures, the Prices Paid Index rose to 45.4, its highest reading since August 2018.