(Kitco News) - The gold market is not seeing much movement as the U.S. economy sees solid improvement in the manufacturing sector but slower growth in the service sector.
Thursday, S&P Global said its preliminary Purchasing Managers Index for the manufacturing sector rose to 51.5, up from January’s reading of 50.7. Activity in the manufacturing sector was better than expected as economists forecasted a relatively neutral reading at 50.5.
Activity rose to its highest level in 17 months, the report said.
At the same time, the service sector PMI dropped to 51.3, down from last month’s reading of 52.5. Activity in the service sector was weaker than expected as consensus forecasts looked for a reading of around 52.4.
The report said that activity in the service sector dropped to a three-month low.
The gold market is not seeing much reaction to the latest economic data. April gold futures are roughly unchanged on the day, last trading at $2,033 an ounce.
“The early PMI data for February indicate that the US economy continued to expand midway through the first quarter, pointing to annualized GDP growth in the region of 2%. Although service sector growth cooled slightly, manufacturing staged a welcome return to growth, with factory output growing at the fastest rate for ten months,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, in the report.
“Service sector growth has slipped slightly, however, as has confidence in the year-ahead outlook among service providers, in part reflecting some pull back in the extent to which interest rates are expected to fall in 2024. It is nevertheless welcome news that both manufacturing and services are expanding again for the first time in three months,” Williamson added.
