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Gold prices stuck in neutral as U.S. durable goods orders rise 1.0% in October

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(Kitco News) - The gold market is trading in roughly neutral territory with prices below $1,750 an ounce; however, the precious metal is seeing little movement following better than expected U.S. manufacturing data.

Wednesday, the Commerce Department said that U.S. durable-goods orders increased 1.0% last month, up from September’s 0.3% rise. The data was better than expected; consensus expectations compiled by various news organizations called for durables to increase 0.4%.

At the same time core durable goods, which excludes the volatile transportation sector increased 0.5%, up from September’s revised decline of 0.9%. Economists were expecting to see an unchanged reading.

The gold market was under pressure ahead of the report and hasn’t seen any shift in momentum either way in initial reaction. December gold futures last traded at $1,738.40 an ounce, down 0.05% on the day.

Along with the solid headline number, the report noted that shipments of manufactured goods increased 0.4% last month, following September’s 0.3% increase. The report noted that shipments have increased 17 out of the last 18 months.

Katherine Judge, senior economist at CIBC, said that the solid shipping data highlights underlying strength in the economy.

“For the current quarter, shipments of core capital goods were up strongly at 1.3% m/m in October, helped by the alleviation of supply chain issues that is allowing for the fulfillment of past orders, and suggesting a contribution to growth from business investment in equipment,” she said.

Andrew Hunter, senior U.S. Economist at Capital Economics, said that although the U.S. manufacturing sector has been resilient in the face of rising interest rates, momentum is still falling.

“Overall, while easing shortages will probably continue to lend support in the near term, we still think the surge in interest rates will feed through to more pronounced weakness in equipment investment before long,” he said.

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