(Kitco News) - Gold prices are holding steady after the Philadelphia Federal Reserve's manufacturing sector survey rose further into expansionary territory this month.
On Thursday, the regional central bank said its manufacturing business outlook for July rose to 13.9, compared to June’s reading of 1.3. The data was better than expected as economists were looking for a reading of 2.9 this month.
"The survey’s indicator for general activity rose, and the indexes for shipments and new orders turned positive,” the report said. “The employment index also turned positive, suggesting an overall increase in employment levels. Both price indexes continued to indicate overall price increases. Most future activity indicators rose, suggesting more widespread expectations for overall growth over the next six months.”
Gold prices held steady in the minutes following the manufacturing data release, which came out at the same time as weekly jobless claims. Spot gold last traded at $2,464.81 and is up 0.24% on the day.
The key components of the index showed improvement this month. “The indexes for new orders and shipments both turned positive following two consecutive negative readings,” they wrote. “The current new orders index rose 23 points to 20.7 in July, its highest reading since March 2022. The current shipments index jumped 35 points to 27.8, its highest reading since May 2022.”
On balance, firms reported an increase in employment for the first time since October. “The employment index rose 18 points to 15.2 in July, its highest reading since October 2022,” the report said. “Twenty-eight percent of the firms reported an increase in employment, while 13 percent reported a decrease; 58 percent reported no change. The average workweek index fell 7 points to -1.6.”
The firms also reported increases in prices overall in July, but most firms continued to report no change in prices. “The prices paid index edged down 3 points to 19.8,” they said. “Almost 26 percent of the firms reported increases in input prices, while 6 percent reported decreases; 65 percent reported no change. The current prices received index rose 11 points to 24.2, its highest reading since January 2023. One-quarter of the firms reported increases in the prices of their own goods (up from 14 percent last month), while 1 percent reported decreases (up from 0 percent); 68 percent reported no change (down from 86 percent).”
“Responses to the July Manufacturing Business Outlook Survey suggest that regional manufacturing activity expanded overall this month,” the Philly Fed wrote. “The indicator for current activity rose, and the indexes for shipments and new orders turned positive. On balance, the firms indicated an increase in employment, and the current price indexes suggest overall increases in prices.”
Most of the survey’s broad indicators for future activity rose, they noted, suggesting more widespread expectations for growth over the next six months.
