(Kitco News) Gold price ticked down as the headline manufacturing index from the Institute for Supply Management disappointed expectations in January, contracting for the third month in a row.
The ISM manufacturing index was at 47.4% last month versus the consensus forecast of 48%. The monthly figure also marked a one-percentage-point decrease from December’s reading of 48.4%.
“The Manufacturing PMI® figure is the lowest since May 2020, when it registered a seasonally adjusted 43.5 percent,” the report said.
Readings above 50% in such diffusion indexes signify 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 was down 0.2 percentage points at 50.6% in January but remained in expansion territory. The index for new orders contracted to 42.5% from 45.1%, and the production index declined to 48% from 48.6%.
The drop in manufacturing activity confirms forecasts that the U.S. economy will soon fall into recession, said Capital Economics senior U.S. economist Andrew Hunter.
“The headline fall was even sharper than the decline in December, pouring cold water on the claims of some commentators that the sector is on the cusp of a recovery,” Hunter said. “Notably, the index has also now fallen below the low point reached during the manufacturing downturn of 2015-16 and, aside from the pandemic, is at its weakest since the global financial crisis.”
Following the release, gold prices edged down slightly, with April Comex gold futures last trading at $1,941.30, down 0.21% on the day.
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