Gold prices holding firm above $1,900 as Philly Fed Survey rises to -8.9
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(Kitco News) - The gold market is holding support above $1,900 even as the Philadelphia Federal Reserve reported better-than-expected activity in its regional manufacturing index, even as sentiment remains in negative territory.
Thursday, the regional central bank said its manufacturing business outlook rose to -8.9 in December, up from November’s of -13.8 reading. Despite the negative reading the data managed to beat expectations as consensus forecasts called a reading around -11.
Although the headline data came in better than expected, the report noted that activity has been in negative territory for the last five consecutive months.
“More than 33 percent of the firms reported declines in activity, exceeding the 24 percent that reported increases,” the report said.
The gold market is not seeing much reaction to the latest manufacturing data as it continues to hold on to gains above $1,900 an ounce. February gold futures last traded at $1,912.50, up 0.29% on the day.
The report also noted in its special questions that firms continue to see higher costs for their raw materials and labor, indicating that inflation remains a threat.
Looking at the components of the report, the New Orders Index rose to -10.9, up from December’s reading at -22.3. At the same time the Shipments Index rose to 11.1, up from the previous reading at -0.9.
The survey noted continued strength in the labor market with the Number of Employees Index rising to 10.9, up from the previous reading at -0.9.
The cooling activity is also having an impact on inflation, even as prices remains relatively high. The Prices Paid Index dropped to 24, down from December’s reading of 36.3.