(Kitco News) - The gold market continues to struggle in the face of solid momentum in the U.S. dollar, which could find further support as activity picks up in the manufacturing sector.
The Institute for Supply Management (ISM) announced on Monday that its Manufacturing Purchasing Managers Index rose to 48.4, up from October’s reading of 46.5. Although the sector remains in contraction territory, the headline number was better than expected, as consensus forecasts looked for a rise to 47.7.
“U.S. manufacturing activity contracted again in November, but at a slower rate compared to last month. Demand continues to be weak but may be moderating, output declined again, and inputs stayed accommodative,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, in the report.
Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
The gold market is not seeing much reaction to the latest economic data has it remains under pressure. February gold futures last traded at $2,669.50 an ounce, down 0.43% on the day.
The components of the report showed broad-based strength. The New Orders Index rose to 50.4%, up from October’s reading of 47.1%. At the same time, the Production Index rose to 46.8%, up from 46.2%.
The labor market also improved in November. The Employment Index rose to 48.1, up from the previous reading of 44.4%.
