(Kitco News) - The gold market remains in a tough position holding on to gains below $1,650 an ounce but seeing little movement following mixed U.S. manufacturing data.
Tuesday, the Commerce Department said that U.S. durable-goods orders fell 0.2% last month, following a 0.1% decline in July. The data was weaker than expected; consensus expectations called for durables to increase 0.1%.
The report noted that the manufacturing of transportation equipment has declined for the past two months.
Stripping out the volatile transportation sector, core durable goods rose 0.2%, relatively in line with expectations.
The gold market is not seeing much movement following the latest economic data. December gold futures last traded at $1,647 an ounce, up 0.83% on the day.
Katherine Judge, senior economist at CIBC, noted that despite the weak headline number, the core data showed healthy economic activity. She noted that core capital goods, excluding defense and transportation, a leading indicator of business investment, increased 1.3%.
"While these figures are reported in nominal terms, that's a positive sign for business investment ahead. There was also good news for shipments in the core capital goods group, an indicator of business investment in equipment in the current quarter, which are up by 9.6% annualized over the last three months," she said.
However, Andrew Hunter, senior U.S. economist at Capital Economics, said that he doesn't expect the current momentum in the manufacturing sector to last.
"Although the manufacturing new orders surveys have generally rebounded over the past couple of months specifically, nearly all of them remain consistent with underlying capital goods orders contracting quite sharply over the coming months. With the impact of the Fed's aggressive tightening still feeding through, further declines in equipment investment probably lie in store," he said.
