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(Kitco News) - The gold market continues to test resistance around $1,980 an ounce but is not seeing any new bullish momentum as the Philadelphia Federal Reserve said its manufacturing sector remains stuck in contraction territory.
Thursday, the regional central bank said its manufacturing business outlook for July was relatively unchanged, rising slightly to -13.5, compared to June's reading of -13.7. The data significantly missed expectations as economists looked for some improvement to -10.1
This is the eleventh consecutive reading in negative territory.
The gold market is not seeing a massive reaction to the latest disappointing economic data. August gold futures last traded at $1,978 an ounce, down 0.14% on the day.
The components of the index show broad-based weakness. The New Orders Index dropped to -15.9, down from June's reading of -11. At the same time, the Shipments Index dropped to -12.5, down from the previous reading of 9.9.
The Labor market also lost momentum, with the Number of Employee Index dropping to -1.0, down from -0.4.
A further positive for gold, the report noted a drop in inflation pressures. The Prices Paid Index dropped to 9.5, down from June's reading of 10.5.
According to some market analysts, the disappointing economic data and the weak inflation give the Federal Reserve room to end its tightening cycle after next week's monetary policy meeting.
