Gold price in striking distance of $1,800 following U.S. ISM data
(Kitco News) - The gold market remains within striking distance of $1,800 an ounce as activity in the U.S. manufacturing sector hold steady in November, according to the latest numbers from the Institute for Supply Management (ISM).
Wednesday, the ISM said its manufacturing index showed a reading of 61.1% for November, up from October's reading of 60.8%. The data was relatively in line with consensus forecasts.
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.
The latest economic data is having little impact on gold as the precious metal continues to hold in positive territory. February gold futures last traded at $1,793.2 an ounce, up nearly 1% on the day.
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Although activity continues to expand, the ISM noted that the economy still faces some challenges
"The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement. All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products," said Timothy R. Fiore chair of the ISM Manufacturing Business Survey Committee. "However, panel sentiment remains strongly optimistic, with 10 positive growth comments for every cautious comment. Panelists remain focused on the importance of improving supply chain issues to respond to ongoing high levels of demand."
Looking at some of the components of the report, the New Orders Index rose to 61.5%, up from October's reading of 59.8%. At the same time, the Production Index rose to 61.5%, up from the previous reading of 59.3%.
The labor market also improved, rising to 53.3%, up from October's reading of 52.0.
Negative for the gold market, at first glance, it appears that inflation has peaked as the Price Index dropped to 82.4%, down from October's reading of 85.7%.