(Kitco News) - The gold market remains in roughly neutral territory as activity in the manufacturing sector picked up last month.
Monday, the Commerce Department said that U.S. durable-goods orders increased by 0.7% in May. The data was better than expected; consensus expectations compiled by various news organizations called for durables to increase 0.1%.
Excluding the volatile transportation sector, new orders increase 0.7% the government said. Core durable goods orders were much better than expected as economists were calling for an increase of 0.4%.
The gold market has seen little reaction to the mixed economic data as prices trade below $1,850 an ounce, which has become an important psychological level. August gold futures last traded at $1,831.60 an ounce, nearly unchanged on the day.
According to some economists, the latest manufacturing numbers could help to ease growing recession fears; however, they also note that there is still plenty of uncertainty swirling around financial markets.
“Durable goods orders have risen in 7 of the past 8 months. This will offer somewhat of a relief on growth worries but could easily swing the worries back to inflation,” said Adam Button, Chief Currency Strategist at Forexlive.com.
Katherine Judge, senior economist at CIBC also said that inflation remains a dominant focus among consumers and businesses.
“Shipments were up by a solid 0.8% in that group, leaving the three-month average annualized growth rate at 9%, a positive signal for business investment in equipment in the current quarter, although these figures are being amplified by price increases and won't look as robust in volume terms,” she said.
