(Kitco News) - The gold market is attracting a modest bid as it pushes closer to resistance at $5,000 an ounce, even as the U.S. manufacturing sector appears to have found a solid footing, according to the latest report from the Philadelphia Federal Reserve.
The regional central bank said its Manufacturing Business Outlook Survey for February rose sharply to 16.3, up from 12.6 in January. The data were far better than expected, as economists expected the index to drop to 7.5 this month.
The report said activity in the region’s manufacturing sector hit its highest level since September.
“Responses to the February Manufacturing Business Outlook Survey suggest regional manufacturing activity continued to expand this month. The indicators for current activity and new orders remained somewhat elevated, while the shipments index declined to a near-zero reading,” the report said.
Gold prices were trading in negative territory ahead of the report, but pushed higher in the initial reaction. Spot gold last traded at $4,994.80 an ounce, up 0.34% on the day.
Despite the better-than-expected headline reading, components of the index declined. The New Orders Index dropped to 11.7, down from January’s reading of 14.4. At the same time, the Shipments Index dropped to 0.3, down from the previous reading of 9.5.
The report also highlighted potential weaknesses in the labor market. The Number of Employees Index dropped to -1.3, down from January’s reading of 9.7.
Although inflation remains elevated, the report noted that price pressures have declined. The Prices Paid Index dropped to 38.9, down from the previous reading of 46.9.
