Gold price near daily lows as U.S. durable goods beat expectations
(Kitco News) Gold was trading near daily lows after the newly released data showed that orders for long-lasting U.S. factory goods were up 3.4% in January versus the expected advance of 1.1%.
Meanwhile, December’s data was upwardly revised to an increase of 1.2%.
The monthly increase in durable-goods orders equaled to $8.5 billion and was largely led by transportation-related items.
The core durable goods section, which excludes the volatile transportation sector, was up 1.4% in January, beating expectations. Excluding defense, new orders advanced 2.3%.
The government’s durables report covers items with an expected life of at least three years, such as kitchen appliances, computers, furniture, autos, and airplanes.
Even though spending on durable goods represents a small part of American economic output, economists carefully watch for any changes as a sign of where the economy might be heading.
Following the release, gold prices remained under pressure and were trading near daily lows, with April Comex gold futures last at $1,778.90, down 1.06% on the day.
Economists said the durable goods orders report more than tripled the consensus expectations.
“The upside surprise added to sizeable positive revisions from the prior month's readings,” said CIBC Capital Markets senior economist Katherine Judge. “However, stripping that measure down even further to core capital goods orders which excludes both defense and aircraft, and is a forward-looking indicator of capital spending, orders growth decelerated to 0.5%, still leaving that group up 7% from year-ago levels. Although consumer spending gains will be tilted towards services that are re-opening going forward, durable goods orders should be supported by a cyclical improvement in capital goods demand.”