Gold prices holding near $1,950 following mixed flash U.S. PMI data
(Kitco News) - The gold market remains caught in a consolidation pattern, seeing little movement following mixed activity in the service and manufacturing sector, according to preliminary data from S&P Global.
Friday, the economic research firm said that its flash U.S. manufacturing Purchasing Managers Index for April rose to 59.7, up from March’s of 58.8. The data was stronger than expected as economists were looking for a reading around 58.1.
The report said that activity in the manufacturing is at a seve-month high.
Meanwhile, activity in the service sector dropped more than expected. The report said that the Flash PMI for the service sector fell to a reading of 54.7, in April, down from March’s reading of 58.0. Economists were expecting the index be unchanged.
The report said that activity in the service sector fell to a three-month low.
The economic data is having little impact on the gold market as prices continue to consolidate around $1,950 an ounce. June gold futures last traded at $1,947.60 an ounce, roughly unchanged on the day.
The report said that rising inflation pressures appear to be taking a toll on the service sector.
“Latest ‘flash’ PM data from S&P Global signaled a strong, but slower increase in business activity across the US economy in April. Although still faster than January’s Omicron-induced slowdown, overall growth was dampened by a softer rise in service sector output following pressure on customer spending as prices continued to increase markedly,” the report said.
Chris Williamson, chief business economist at S&P Global, said that although the U.S. economy sees some headwinds it still has some solid momentum.
“These headwinds, plus increased concerns over the economic outlook and tightening monetary policy, meant business confidence about the outlook slipped sharply lower in April. However, with the overall pace of economic growth and hiring remaining relatively solid, for now the focus from a policy perspective is likely to remain firmly on the need to rein in the record high inflationary pressures signalled by the survey,” Williamson said in the report.