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Spot gold price remains below $1,700 as Philly Fed, New York Fed release mixed manufacturing data

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(Kitco News) - The gold market continues to struggle below $1,700 an ounce as reports from New York Federal Reserve and the Philadelphia Federal Reserve show mixed health in the U.S. manufacturing sector.

The two regional central banks release manufacturing survey's Thursday. The New York Federal Reserve said its Empire State manufacturing survey's general business conditions index rose to -1.5 for September, up sharply from August's drop to -31.3. The data beat expectations as economists were looking for the index to show a contraction of -12.7.

Meanwhile, the Philly Fed said its manufacturing business outlook fell to -9.9 for September, down sharply from August's reading of 6.2. The data missed expectations as consensus forecasts called for a drop to around 2.4.

The gold market is not seeing much reaction to the latest manufacturing data as prices have seen solid technical selling in the overnight session, pushing prices below $1,700 an ounce. Spot gold last traded at $1,684.80 an ounce, down 0.72% on the day.

Although manufacturing activity within the New York region remains in contraction territory, it has improved significantly from August, which saw the biggest drop in the survey's history outside of the pandemic.

Meanwhile, the Philadelphia manufacturing sector has been relatively volatile in the last few months. Activity rebounded in August after falling to a two-year low in July. However, that momentum has proved to be short-lived, with the survey back down to July levels.

Looking at the components of the Empire State survey, the New Orders index rose to 3.7, up from August's reading of -29.6. The Shipments Index rose to 19.6, up from -24.1. The report also noted solid improvement in the labor market, with the Number of Employees index rising to 9.7.

Impacting gold prices, the report highlighted a sharp drop in inflation pressures, with the Prices Paid index falling to 39.6, down from August's reading of 55.5.

"This index has fallen a cumulative thirty-nine points over the past three months, pointing to a significant and ongoing deceleration in price increases," the report said.

Meanwhile, the Philly Fed Survey paints a slightly different picture, highlighting that "his is the index's third negative reading in the past four months."

Looking at some of the components of the report, the New Orders index fell to -17.6, down from August's reading of -5.1. The Shipments index dropped to 8.8, down from the previous reading of 24.8.

The labor market also lost momentum, with the Number of Employees index falling to 12, down from August's reading of 24.1.

Similar to the Empire State, the Philly Fed survey, showed a solid drop in inflation. The Price Paid index dropped to 29.8, down from the previous reading of 43.6.

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