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Gold price climbs as U.S. manufacturing sector disappoints in June

Kitco Media
By Anna Golubova
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(Kitco News) The gold market jumped to new daily highs after the U.S. manufacturing sector contracted for the eighth consecutive month in June.

The Institute for Supply Management (ISM) manufacturing index was at 46% last month. Market consensus calls were expecting the index to come in at 47.2%.

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. April marked the sixth consecutive monthly contraction.

Following the release, gold prices climbed to new daily highs of $1,939.90 an ounce. August Comex gold futures were last trading at $1,935.50, up 0.32% on the day.

The employment index fell into contraction territory, down 3.3 percentage points to 48.1% in June, which is what gold reacted to. This comes ahead of the highly anticipated June nonfarm employment report to be released Friday.

The index for new orders remained in contraction territory but climbed three percentage points to 45.6%.

The prices index was also in contraction territory, down 2.4 percentage points at 41.8% from May’s figure of 44.2%.

“The U.S. manufacturing sector shrank again, with the Manufacturing PMI® losing ground compared to the previous month, indicating a faster rate of contraction,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.  “Of the six biggest manufacturing industries, only one — Transportation Equipment — registered growth in June.”

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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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