(Kitco News) - The gold market continues to consolidate just below $3,000, but some analysts expect the precious metal to attract safe-haven demand after data from the New York Federal Reserve showed a significant contraction in the region’s manufacturing sector.
The regional central bank reported that its Empire State Manufacturing Survey dropped to -20.0, down sharply from February’s reading of 5.7. The data was significantly weaker than expected, as economists had forecast a reading of -1.9.
The New York manufacturing sector is experiencing its worst decline in a year.
So far, the gold market has shown little reaction to the disappointing data. Spot gold last traded at $2,990.40 an ounce, up 0.20% on the day.
The report noted a growing stagflation threat as input prices rose at the fastest pace in two years. The Prices Paid Index increased to 44.9, up from February’s reading of 40.0; this marks the third consecutive month of rising input prices.
The report's components showed broad-based weakness. The New Orders Index dropped to -14.9, down from the previous reading of 11.4, while the Shipments Index fell to -8.5.
The report also highlighted weaknesses in the labor market. The Number of Employees Index dropped to -4.1, down from -3.6 in February.
