Gold price faces headwinds as ISM Service PMI hits new record high
(Kitco News) - The gold market is struggling to hold to modest gains following stronger-than-expected momentum in the U.S. service sector, according to the latest data from the Institute for Supply Management (ISM).
Friday, the ISM said its service sector PMI to 69.1% in November, up sharply from October’s reading of 66.7%. Consensus forecasts were calling for a 64.9% reading.
The report said that this a new record for the Service-sector index and the fifth time it has reached a new record this year.
“In November, record growth continued for the services sector, which has expanded for all but two of the last 142 months. Demand continues to outpace supply that has been impacted by capacity constraints, shortages of labor and materials, and logistical challenges. This has also caused demand-pull inflation that is affecting overall business conditions,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.
|Gold price moving higher following disappointing 210K job gains in November|
The gold market, which struggling to find new bullish momentum, is managing to hold critical support levels following the latest economic data. February gold futures last traded at $1,770.70 an ounce, up 0.45% on the day.
The components of the report showed broad-based growth throughout the service sector. The report said that the Business Activity Index rose to 74.6, up from October’s reading of 69.8. At the same time the New Orders Index held steady at 67.0.
The report also showed positive momentum in the labor market. The Employment Index rose to 56.5, up from October’s reading of 51.6.
A negative for the gold market, the report also noted that inflation, while still elevated, might have peaked. The Prices Index dropped to 82.6%, down from October’s reading of 82.9%.