(Kitco News) - The gold market continues to trade near session highs and is seeing little price movement following stronger-than-expected activity in the U.S. manufacturing sector, according to the latest data from the from Institute for Supply Management (ISM).
Monday, the ISM said its Manufacturing Purchasing Managers Index, fell to 52.8% in July, down from June’s reading of 53%. The data was better than expected as economists were looking for a drop to 52.3%.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
The gold market is seeing little reaction to the latest economic data as markets continue to digest last week’s Federal Reserve monetary policy decision and comments from Fed Chair Jerome Powell. Gold has pushed solidly higher as investors expect the U.S. central bank to slow the pace of rate hikes after the summer.
December gold futures last traded at $1,787.10 an ounce, up 0.30% on the day.
Although activity last month was stronger than expected the report said that the pace has dropped to its lowest level since June 2020.
Looking at some of the components of the report, the New Orders Index fell to 48%, down from June’s reading of 49.2%. At the same time the Production Index fell to 53.55, down from the previous reading at 54.9%.
Negative for the gold market, the report noted falling inflation pressures. The Price Index showed a reading of 60%, down sharply June’s reading of 78.5%.
“This is the index’s lowest reading since August 2020,” the report said.
The report noted a further drop in the labor market. The Employment Index fell for the third consecutive month, dropping to 49.9%, down from June’s reading of 47.3%.
