Gold near session lows as ISM Services PMI meets expectations in September
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(Kitco News) - Gold prices are hovering around session lows after activity in the U.S. service sector saw a moderate pullback in September, according to the latest data from the Institute for Supply Management (ISM).
On Wednesday, the ISM said its Services Purchasing Managers Index declined slightly to a reading of 53.6% last month, down from August's reading of 54.5%. The data was right in line with consensus estimates.
“The composite index indicated growth in September for the ninth consecutive month after a reading of 49.2 percent in December 2022, which was the first contraction since June 2020,” said ISM Services Business Survey Committee chair Anthony Nieves in the report. “The Business Activity Index registered 58.8 percent, a 1.5-percentage point increase compared to the reading of 57.3 percent in August. The New Orders Index expanded in September for the ninth consecutive month after contracting in December for the first time since May 2020; the figure of 51.8 percent is 5.7 percentage points lower than the August reading of 57.5 percent.”
Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
“Thirteen industries reported growth in September,” Nieves said. “The Services PMI, by being above 50 percent for the ninth 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 163 months.”
Nieves attributed the slight pullback in the rate of growth for the services sector to “slower rates of growth in the New Orders and Employment indexes.”
Gold remained near session lows after the in-line economic data. Spot gold last traded at $1,817.77 an ounce, down 0.27% on the day and less than a dollar off the early morning low of $1,817.19.