(Kitco News) - The gold market continues to experience significant profit-taking and has failed to attract any safe-haven bids despite mixed performance in the manufacturing and service sectors.
S&P Global reported on Wednesday that its flash Purchasing Managers Index (PMI) for the service sector declined to 51.4, down from March’s reading of 54.4. The data missed expectations, as economists had forecast a reading of around 52.8.
The report noted that activity in the service sector fell to a two-month low.
Meanwhile, activity in the manufacturing sector remains relatively flat, with the flash PMI rising to 50.7 from last month’s reading of 50.2. Economists had expected a decline into contraction territory, forecasting a reading of 49.0.
According to the report, manufacturing activity rose to a two-month high.
The report’s composite index, which measures overall economic activity, came in at 51.2—a 16-month low.
The gold market appears largely indifferent to the economic data, as waves of profit-taking ripple through the marketplace, dragging prices down from the recent intra-day all-time high of $3,500 an ounce. Spot gold last traded at $2,640.40 an ounce, down 3.4% on the day. Prices are now down nearly 7% from Tuesday’s intra-day peak.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the April data points to a marked slowdown in economic activity heading into the second quarter.
He noted that U.S. tariffs and the global trade war are broadly impacting activity and contributing to inflationary pressures.
“Output rose in April at its slowest pace since December 2023, indicating that the U.S. economy is growing at a modest annualized rate of just 1.0%. Manufacturing is broadly stagnating, as any beneficial effects of tariffs are being offset by heightened economic uncertainty, supply chain concerns, and falling exports. Meanwhile, the services sector is slowing amid weakened demand growth, particularly in export-driven segments such as travel and tourism,” he said in the report.
