Gold prices steady as Philly Fed survey returns to negative territory in September
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(Kitco News) - The gold market is continuing to trade in a narrow range after the Philadelphia Federal Reserve said its manufacturing sector survey turned sharply negative this month.
On Thursday, the regional central bank said its manufacturing business outlook for September worsened significantly, falling back into contractionary territory to -13.5, compared to August’s positive reading of 12. The data was far worse than expectations as economists were looking for a flat reading of -0.7.
“The survey’s indicators for general activity, new orders, and shipments returned to negative territory after turning positive in August,” the Philly Fed wrote in the report. August was the first month the survey had given a positive reading after eleven consecutive months in negative territory, and September marks the 14th negative reading in the past 16 months.
The gold market is not seeing a massive reaction to the latest surprising economic data. Spot gold last traded at $1,916.22 an ounce, down 0.75% on the day, and has been trading within $3 of $1,915 since the minutes before the 8:30 AM EDT release.
The key components of the index were largely negative. The New Orders Index dropped from 16.0 last month to -10.2 this month, while the Shipments Index declined 9 points to -3.2 in September.
The labor market components held relatively steady, with the Employment Index coming in at -5.7 after August’s -6.0 reading.
The report also noted a rise in inflation pressures, which should be a concern for Fed watchers. The Prices Paid Index increased to 25.7, up from August's reading of 20.8.
“The survey’s future indexes improved,” they noted however, “suggesting more widespread expectations for growth over the next six months.”