Gold price at daily highs as ISM Manufacturing Index retreats but beats expectations in October
(Kitco News) Gold prices ticked to daily highs as the headline manufacturing index from the Institute for Supply Management retreated in October but came in above expectations.
The ISM manufacturing index was at 60.8% last month, beating the consensus forecast of 60.5%. But the monthly figure marked a 0.3 percentage-point decline from September's reading of 61.1%.
"This figure indicates expansion in the overall economy for the 17th month in a row after a contraction in April 2020," the report said.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
Following the release, gold prices edged up to daily highs, with December Comex gold futures last trading at $1,793.40, up 0.53% on the day.
In October, the employment index rose to 52%, up 1.8 percentage points from the previous month’s reading. The index for new orders decreased to 59.8% from 66.7%, while the production index declined to 59.3% from 59.4%.
The report noted that companies continue to deal with an "unprecedented number of hurdles" in the face of rising demand.
"All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products. Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential," said Timothy Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.
Despite these obstacles, business sentiment remains "strongly optimistic," the report added.