(Kitco News) - Gold is trading close to session highs after the latest data showed the U.S. manufacturing sector weakening last month.
The Institute for Supply Management (ISM) announced on Friday that its Manufacturing Purchasing Managers Index fell to 46.5 in October after it held 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 47.6.
“This is the lowest Manufacturing PMI reading in 2024,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.
Spot gold was trading at a session high of $2,762.27 just after 9 am, but pulled back at the North American market open. Spot gold last traded at $2,756.30 per ounce, up 0.45% on the day.
The report’s components were mixed but largely negative. The ISM noted a sharp rise in inflation pressures, with the Price Index shooting up to 54.8 against expectations for a 48.5 reading and following September’s 48.3 level. At the same time, the Production Index fell to 46.2, 3.6 points lower than the previous month’s reading of 49.8.
The New Orders Index rose to 47.1, slightly above the 47 level expected and up from the 46.1 reported in September. The ISM also noted a slight improvement in the labor market, though it remained in contractionary territory. The Employment Index rose to 44.4, below expectations for a 45 reading but up from 43.9 the previous month.
“U.S. manufacturing activity contracted again in October, and at a faster rate compared to last month,” Fiore said. “Demand continues to be weak, output declined, and inputs stayed accommodative.”
