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Gold price holding above $1,800 following disappointing ISM service-sector data

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(Kitco News) - The gold market is holding on to gains above $1,800 an ounce but is seeing little reaction to weaker than expected momentum in the U.S. service sector, according to the latest data from the Institute for Supply Management (ISM).

Tuesday the ISM said its nonmanufacturing index showed a reading of 60.1% for June, down from May's reading of 64.0%. The data was weaker than expected, as consensus forecasts were calling for a 63.4% reading.

Economists note that this is the lowest reading since February. However, the report noted that June's decline comes after hitting a record high the previous month.

The gold market is holding near session highs above $1,800 an ounce but is seeing little reaction to the latest economic data. August gold futures last traded at $1,811.7 an ounce, up 1.59% on the day.

"The composite index indicated growth for the 13th consecutive month after a two-month contraction in April and May 2020. The rate of expansion in the services sector remains strong, despite the slight pullback in the rate of growth from the previous month's all-time high," said Anthony Nieves, chair of the ISM Services Business Survey Committee, in the report.

Looking at some of the components of the report, the business activities index dropped to a reading of 60.4%, down from May's reading of 66.2%.

At the same time the service-sector labor market also showed weaker momentum with the employee index falling to 49.3%, down from May's reading of 55.3%.

Inflation pressures also eased slightly last month with the prices index falling to 79.5%, down from May's reading of 80.6%.

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