(Kitco News) - New recession fears could be supporting gold prices as the Philadelphia Federal Reserve reported a sharp contraction in its regional manufacturing data.
Thursday, the regional central bank said its manufacturing business outlook fell to 12.3 in July, down from June’s reading of -3.3. The data missed expectations as consensus forecasts called for an increase to 0.9.
The report noted that this is the fourth consecutive month of declines.
“Responses to the July Manufacturing Business Outlook Survey suggest overall declines in regional manufacturing activity this month,” the report said.
The gold market is seeing new bullish momentum as disappointing economic data is taking its toll on the U.S. dollar. Gold prices have pushed above $1,700 an ounce following the latest survey data. August gold futures last traded at $1,705.30 an ounce, up 0.30% on the day.
The components of the report highlighted mixed conditions within the manufacturing sector. New orders dropped to -24.8, down from June’s reading of -12.4. At the same time shipments increased to 14.8, up from the precious reading of 10.8.
The report noted falling momentum in the US. Labor market. The Number of Employees Index dropped to 19.4, down from June’s reading of 28.1.
Negative for gold, the report noted a sharp drop in inflation pressures. The Prices Paid Index dropped to 52.2, down from June’s reading of 64.5.
