Gold price pushes into positive territory following sharp drop in New York Fed Empire State Survey
(Kitco News) - The gold market is seeing some modest support as prices continue to bounce off their session lows following weaker than expected data from the New York Federal Reserve.
Monday, the regional central bank said its Empire State manufacturing survey's general business conditions index fell to a reading of 18.3 in August, down significantly from July's reading of 43. The data was worse expected as consensus forecasts were calling for a reading around 28.9.
The gold market has bounced into positive territory following the disappointing manufacturing data. December gold futures last traded at $1,780.30 an ounce, up 0.12% on the day.
Analysts noted that the survey’s 25-point drop is the biggest since the U.S. economy was ground to a halt at the start of the COVID-19 pandemic last year.
“Business activity continued to expand in New York State, according to firms responding to the August 2021 Empire State Manufacturing Survey, though growth was significantly slower than last month’s record-setting pace,” the report said. “Just over one-third of respondents reported that conditions had improved over the month, while 16 percent reported that conditions had worsened.”
Looking at the components of the report, the new orders index dropped to 14.8, down from July’s reading at 33.2. The report also highlighted weakness in the manufacturing labor market. The Number of Employees Index dropped to 12.8, down from July’s reading at 20.6.
Inflation pressures also continue to creep higher with companies passing on higher costs to consumers. The report said that the selling price index rose to a new record high to 46, up from the previous record at 39.40. The Prices paid index was relatively steady at 76.1.