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Gold prices see small rise after U.S. ISM Services PMI holds steady at 51.9%
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(Kitco News) - The gold market continues to look past healthy economic growth as prices maintain their recent gains above $2,000 an ounce, even as activity in the service sector continues to expand, according to the latest numbers from the Institute for Supply Management (ISM).
Wednesday, the ISM said its Services Purchasing Managers Index came in at 51.9% last month, roughly unchanged from March's reading at 51.8. According to consensus estimates, economists were looking for a smaller drop to 51.2%.
The gold market is not seeing much reaction to the latest economic data as it attracts modest bullish attention. June gold futures last traded at $2,025.90 an ounce, up 0.13% on the day.
"Fourteen industries reported growth in April. The Services PMI®, by being above 50 percent for a fourth month after a single month of contraction and a prior 30-month period of expansion, continues to indicate sustained growth for the sector. The composite index has indicated expansion for all but three of the previous 159 months," said Anthony Nieves, chair of the ISM Services Business Survey Committee. "There has been a slight uptick in the rate of growth for the services sector due mostly to the increase in new orders and ongoing improvements in both capacity and supply logistics. The majority of respondents are mostly positive about business conditions; however, some respondents are wary of potential headwinds associated with inflation and an economic slowdown."
Beyond the headline number, the report noted mixed activity in the index's components. The Business activity index, while remaining in expansion territory, dropped to 52%, down from March's reading of 55.4%. Meanwhile, the New Orders Index increased to 56.1%, up from the previous reading of 52.2%.
Meanwhile, inflation pressures continue to hold at elevated levels, with the Prices Index coming in at 59.6%, up slightly from March's reading.
