(Kitco News) - The U.S. economy remains on solid ground, with activity in both the manufacturing and service sectors continuing to improve, according to the latest data from S&P Global.
Better-than-expected economic data is having little impact on gold, as the precious metal continues to face modest selling pressure, trading around initial support at $4,100 an ounce.
S&P Global reported on Friday that its flash Purchasing Managers’ Index (PMI) Composite Output Index rose slightly to 54.8, up from September’s reading of 53.9.
Total economic activity climbed to a three-month high, driven by solid growth in the service sector, the report said.
The report’s Services PMI Business Activity Index increased to 55.2, up from September’s 54.2. The data came in better than expected; according to consensus forecasts, economists had anticipated a reading of 53.5.
Meanwhile, the preliminary Manufacturing PMI rose to 52.2, up from 52.0 in September, in line with expectations.
“U.S. business activity growth accelerated in October to the second-fastest pace so far this year, according to early ‘flash’ PMI data, accompanied by the largest rise in new business seen in 2025 to date,” the report said.
The gold market is showing little reaction to the latest economic data. Spot gold last traded at $4,101.50 an ounce, down 0.58% on the day.
Although the U.S. economy remains in good shape, the report did note that inflation pressures remain elevated. At the same time, companies are not passing on higher tariff costs to customers and are keeping prices low to remain competitive.
“Firms across both manufacturing and services often reported difficulties passing higher costs on to customers in the face of subdued demand and intense competition,” the report said.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the latest PMI data signals that the economy expanded at a 2.5% annualized rate in October, relatively steady from the third quarter.
While the economy is entering the final quarter of 2025 in positive territory, Williamson said that expectations are not that positive.
“Business confidence in the outlook for the coming year has deteriorated further, and is at one of the lowest levels seen over the past three years as companies worry about the impact of policies, most notably tariffs. Companies are also concerned over disappointing export sales, especially in manufacturing, and factories are seeing an unprecedented rise in unsold stock,” he said.
