(Kitco News) - The gold market is giving back some earlier gains after the Philadelphia Federal Reserve's manufacturing sector survey moved higher into positive territory this month.
On Thursday, the regional central bank said its manufacturing business outlook for October rose to 10.3, compared to September’s reading of 1.7. The data was much better than expected as economists were looking for a reading of 3.0 this month.
“The survey’s indicators for current general activity, new orders, and shipments all rose, with the latter two returning to positive territory this month,” the report said. “The employment index declined and suggested mostly steady employment conditions. Both price indexes edged down but continue to indicate overall increases in prices. Expectations for growth over the next six months were more widespread this month as most future indicators rose.”
Gold prices declined in the minutes following the manufacturing data release, which came out at the same time as retail sales for September and weekly jobless claims. Spot gold last traded at $2,677.96, up 0.15% on the day after trading as high as $2,688.84 earlier this morning.
The key components of the index improved this month. “The indexes for new orders and shipments, which had turned negative last month, nearly recovered their declines from September,” the report noted. “The new orders index climbed 16 points to 14.2, and the shipments index rose 22 points to 7.4.”
Firms also reported mostly steady employment, but the employment index declined from 10.7 last month to -2.2 in October. “Most firms (76 percent) reported no change in employment levels, while the share reporting decreases (13 percent) narrowly exceeded the share reporting increases (11 percent),” the report said. “The average workweek index inched up from -13.6 to -11.8.”
The Philly Fed report also showed firms continued to see price increases.
“Both price indexes declined but remained positive,” they wrote. “The prices paid index declined from 34.0 to 29.7. Nearly 35 percent of the firms reported increases in input prices, while 5 percent reported decreases; 60 percent of the firms reported no change. The current prices received index decreased 7 points to 17.9. Almost 22 percent of the firms reported increases in prices received for their own goods, 4 percent reported decreases, and 72 percent reported no change.”
The survey’s broad indicators for future activity suggest more widespread expectations for growth over the next six months.
