(Kitco News) - The gold market is consolidating around critical support levels as the U.S. manufacturing sector sees stable activity in March.
Wednesday, the Commerce Department said that U.S. durable goods orders increased 2.6% last month, following February’s downwardly revised reading to 0.7%. The data was roughly in line with expectations as economists were looking for an increase of 2.5%.
Core durable goods, which strips out the volatile transportation sector rose 0.2% in March after February’s data was revised down to a 0.3% increase. The data was also roughly in line with expectations as consensus estimates looked for a 0.3% increase.
Capital goods orders, excluding air and nondefense spending, increased 0.2%, meeting expectations. However last month’s data was revised lower to 0.4%.
The gold market, while under pressure, has moved off its session lows in reaction to the latest manufacturing data. June gold futures last traded at $2,333.30 an ounce, down 0.37% on the day.
Analysts note that while the headline numbers rose roughly in line with expectations, the disappointing revisions do not bode well for economic growth, which could provide some safe-haven support for gold.
"While underlying capital goods shipments rose last quarter, they were probably little changed in real terms and the plunge in non-defence aircraft shipments suggests that overall business equipment investment declined," said Stephen Brown, Deputy Chief North America Economist at Capital Economics in a note.
