(Kitco News) - The gold market has managed to bounce off its nearly two-week lows, but solid activity in the U.S. manufacturing sector could weigh on the precious metal ahead of the Memorial Day long weekend.
Friday, the Commerce Department said that U.S. durable goods orders increased 0.7% last month, following March’s revised 0.8% increase. The data significantly beat expectations as economists were looking for a 0.9% decline.
Core durable goods, which strips out the volatile transportation sector rose 0.4% in April after March’s unchanged reading. The data was better than expected as consensus estimates looked for a 0.1% increase.
Capital goods orders, excluding air and nondefense spending, increased 0.3%, compared to March’s decline of 0.2%; economists were looking for a 0.1% increase.
In initial rection to the data, June gold futures last traded at $2,341.60 an ounce, up 0.20% on the day.
Although the economic data was better than expected, Stephen Brown, Deputy Chief North America Economist at Capital Economics, said that he expects manufacturing activity to slow this year.
“After the falls in the previous two months, underlying capital goods shipments are still on track for muted growth this quarter, which is consistent with business equipment investment growth slowing after the modest 2.1% annualized gain in the first quarter,” he said in a note.
