(Kitco News) - Gold prices continue to struggle and have been unable to hold initial support at $3,300 an ounce, as the U.S. manufacturing sector shows better-than-expected activity—even as it continues to contract.
The Commerce Department announced Tuesday that U.S. durable goods orders fell 6.3% last month, following March’s revised increase of 7.5%. The data was better than expected, as economists had forecast a 7.6% drop.
Core durable goods, which exclude the volatile transportation sector, increased 0.2% in April, also beating the consensus forecast of a 0.1% decrease.
Finally, Non-defense capital goods excluding airplane manufacturing dropped -1.3%, compared to March’s 0.3% increase; economists were looking for a 0.1% decline.
The gold market is not seeing much reaction to the mixed manufacturing data; however, analysts note that any report easing initial fears of a harsh economic slowdown will weigh on gold’s safe-haven demand. Spot gold last traded at $3,292.40 an ounce, down 1.46% on the day.
Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management, said that although the economy is slowing, it is not completely collapsing.
“For now, we see an economy that is slowing and taking some time to adapt to the “new normal” of rapid changes in trade policy, but as long as it stays out of recession, we believe the market has more room to go to the upside in the short run,” she said.
