(Kitco News) - The gold market has not been able to attract any sustainable momentum even as the U.S. manufacturing sector falls deeper into contraction territory.
Monday, the Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index dropped to 48.5%, compared to May’s reading of 48.7%. The data was weaker than expected as consensus forecasts looked for an increase of 49.2%.
“U.S. manufacturing activity continued in contraction at the close of the second quarter. Demand was weak again, output declined, and inputs stayed accommodative,” said Timothy Fiore, Chair of theISM Manufacturing Business Survey Committee.
The gold market has seen solid selling pressure since the data was released and is currently trading near session lows. August gold futures last traded at $2,331.30 an ounce, down 0.30% on the day.
Looking at the components, the report noted mixed weakness within the manufacturing sector. The New Orders Index rose to 49.3%, up from the previous reading of 45.4%.
Meanwhile, the Production Index dropped to 48.5, down from 50.2 in May.
The labor market also lost momentum with the Employee Index falling to 49.3%, down from 51.1% in June.
However, weaker activity is also helping to ease inflation pressures. The Prices Index dropped to 52.1%, down from June’s reading of 57%.
