Gold prices holding solid gains as Empire State Survey fall to -9.1
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(Kitco News) - The gold market is holding on to solid gains trading near session highs after the New York Federal Reserve reported weaker-than-expected activity with the manufacturing sector.
Monday, the regional central bank said that its Empire State manufacturing survey's general business conditions index fell to a reading of -9.1 in October, down from September’s negative reading at 1.5. The data significantly missed expectations as economists were looking for the index to fall to -4.3.
“Twenty-three percent of respondents reported that conditions had improved over the month, and thirty-two percent reported that conditions had worsened,” the report said.
The gold market was holding solid gains ahead of the report and has seen the bullish price action continue to firm. December gold futures last traded at $1,669.60 an ounce, up 1.26% on the day.
Despite the disappointing headline drop, the components of the report were not as dreary. The New Orders Index was unchanged at 3.7. At the same time the Shipments index dropped to -0.3, down from September’s reading at 19.6.
The labor market also lost some momentum with the Number of Employees Index falling to 7.7, down from September’s reading at 9.7.
Negative for the gold price, the report showed persistent inflation pressure within the manufacturing sector. The Prices Paid Index rose to 48.6, up from September’s reading at 39.6.
According to some economists, the latest manufacturing data does not bode well for financial markets as rising inflation pressures will force the Federal Reserve to continue to aggressively raise interest rates, even as the economy continue to weaken.
Markets have all but priced in a 75-basis point hike next month. Markets also see a 64% chance of another 75-basis point move in December.