(Kitco News) Gold price ticked down from fresh six-month highs as the headline manufacturing index from the Institute for Supply Management disappointed expectations in December, contracting slightly more than expected.
The ISM manufacturing index was at 48.4% last month versus the consensus forecast of 48.5%. The monthly figure also marked a 0.9 percentage-point increase from November’s reading of 49%.
“The Manufacturing PMI® figure is the lowest since May 2020, when it registered 43.5 percent,” the report said.
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 employment index rose to 51.4% in December, up 3 percentage points from the previous month’s reading. The index for new orders decreased to 45.2% from 47.2%, while the production index declined to 48.5% from 51.5%.
The two manufacturing industries that posted growth in December were primary metals and petroleum and coal products. Thirteen industries saw contraction, including wood products, fabricated metal products, chemical products, paper products, plastics and rubber products, electrical equipment, appliances and components, and furniture and related products.
Analysts noted that the monthly drop was largely driven by a drop in the production index. “Employers continued to be cautious in managing headcounts at the end of last year in the face of uncertain economic conditions in 2023,” said CIBC Capital Markets executive director Karyne Charbonneau.
Following the release, gold prices pared early-morning gains, with February Comex gold futures last trading at $1,855.80, up 0.53% on the day. Earlier in the session, gold hit fresh six-month highs of $1,871.30.
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