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Gold price drops below $2,000 as U.S. manufacturing sector contracts for sixth month in a row but but beats expectations

Kitco Media
By Anna Golubova
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(Kitco News) The gold market reversed gains and fell below $2,000 an ounce after data showed the U.S. manufacturing sector contracting for the sixth consecutive month in April.

The Institute for Supply Management (ISM) manufacturing index was at 47.1% last month, slightly better than the expected 46.8%. The April figure was also 0.8 percentage points higher than March’s 46.3%.

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 advanced into expansion territory, up 3.3 percentage points to 50.2% in April. The prices index also made it into the expansion territory, increasing 4 percentage points to 53.2% from March’s figure of 49.2%. The index for new orders rose 1.4 percentage points to 45.7% but remained in contraction territory.

“The U.S. manufacturing sector contracted again; however, the Manufacturing PMI® improved compared to the previous month, indicating slower contraction,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Of the six biggest manufacturing industries, two — Petroleum & Coal Products; and Transportation Equipment — registered growth in April.”

Following the release, gold prices fell, with June Comex gold futures last trading at $1,996.70, down 0.12% on the day.

Live 24 hours gold chart [Kitco Inc.]

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Anna Golubova

Anna Golubova is the Producer for Kitco News. With more than ten years of experience in media, she has covered a range of topics, focusing on economy and politics. Anna began to exclusively cover economic news in 2013, attending media lockups at the Bank of Canada and Statistics Canada to report on a range of key macro economic events, including interest rate announcements, GDP, unemployment, and retail. She holds a Master of Arts in International Relations from NPSIA, Carleton and a Bachelor's degree in Political Science and History from the University of Ottawa.

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