Gold prices see little movement following record rise in ISM non-manufacturing PMI
(Kitco News) - Gold prices are trading relatively stable Monday even as the U.S. service sector saw stronger-than-expected momentum last month, according to the latest data from the Institute for Supply Management (ISM).
Monday, the ISM said its nonmanufacturing index showed a reading of 63.7% for March, up significantly from February’s reading of 55.3%. The data also handily beat expectations as consensus forecasts were calling for a reading of 58.3%.
The report noted that this is a record high for sentiment in the service sector.
“The previous high was in October 2018, when the Services PMI registered 60.9%,” the report said. “The March reading indicates the 10th straight month of growth for the services sector, which has expanded for all but two of the last 134 months.”
The gold market is seeing little reaction to the latest economic data as prices hold above $1,700 an ounce. June gold futures last traded at $1,728.40 an ounce, unchanged on the day.
Looking at the components of the report, the Business Activity Index increased to a reading of 69.4%, up from February’s reading of 55.5%. Meanwhile, the new orders index rose to 67.2%, up from the previous reading of 51.9%.
The labor market also saw improved sentiment. The report said that the Employment Index increased to a reading of 57.2%, up from February’s level of 52.7%.
However, positive for the gold market, inflation continues to rise in the service sector. The prices index rose to 74.0% last month, up from the previous level of 71.8%.
“There was a substantial increase in the rate of growth in the services sector in March. Respondents’ comments indicate that the lifting of coronavirus (COVID-19) pandemic-related restrictions has released pent-up demand for many of their respective companies’ services. Production-capacity constraints, material shortages, weather and challenges in logistics and human resources continue to cause supply chain disruption,” says Anthony Nieves, chair of the ISM Services Business Survey Committee.