(Kitco News) - Gold is trading just off session highs after the latest data showed the U.S. manufacturing sector holding steady in contractionary territory last month.
The Institute for Supply Management (ISM) announced on Tuesday that its Manufacturing Purchasing Managers Index remained at 47.2 in September, identical to August’s 47.2 reading. The headline number was lower than expected, as consensus forecasts looked for a rise to 47.5.
“U.S. manufacturing activity contracted again in September, and at the same rate compared to last month,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Demand continues to be weak, output declined, and inputs stayed accommodative. Demand slowing was reflected by the New Orders Index remaining in contraction territory, New Export Orders Index contracting at a faster rate, Backlog of Orders Index staying in strong contraction territory, and Customers’ Inventories Index indicating customers’ inventories were ‘about right.’”
Gold prices were trading at session highs just before the 10 am EDT release, but pulled back slightly afterward. Spot gold last traded at $2,663.17 per ounce, up 1.08% on the day.
The report’s components were mixed. The New Orders Index rose to 46.1, slightly above the 46 level expected and up from the 44.6 reported in August. At the same time, the Production Index also rose to 49.8, 5 points higher than the previous month’s reading of 44.8.
However, the ISM also noted a decline in the labor market deeper into contractionary territory. The Employment Index fell to 43.9, below expectations for a 47 reading and down from 46 the previous month.
On the positive side, the report also noted a sharp fall in inflation pressures. The Price Index declined to 48.3 against expectations for a 53.3 reading and following August’s 54 level.
