(Kitco News) - Solid activity in the U.S. manufacturing sector is creating modest selling pressure for gold, as easing recession fears weigh on the precious metal’s safe-haven allure.
The Commerce Department announced Wednesday that U.S. durable goods orders rose 0.5% in September, following August’s revised 3.0% increase. The data aligned with economists’ expectations.
Core durable goods, which strip out the volatile transportation sector, rose 0.6%, beating the consensus forecast for a 0.2% increase.
Meanwhile, non-defense capital goods orders excluding aircraft increased 0.9% in September, also exceeding consensus expectations for a 0.2% rise. August’s orders were revised higher to 0.9%.
Although gold prices have dropped in its initial reaction to the better-than-expected economic data, the market is still holding solid overnight gains. Spot gold last traded at $4,156.60 an ounce, up 0.65% on the day.
Some analysts have noted that gold has managed to hold critical support above $4,000 an ounce due to growing fears that the U.S. economy is headed towards a recession. With so much bad news priced into markets, analysts have said that gold could be sensitive to better-than-expected numbers.
On the other side of the argument, other analysts point out that the latest data is from two months ago and is seen as outdated. September’s reports were not published in October because of the U.S. government’s record 43-day shutdown.
