(Kitco News) - The gold market could face further lackluster safe-haven demand as the Philadelphia Federal Reserve reported solid manufacturing activity in its region, easing recession fears among investors.
The regional central bank said its manufacturing business outlook for April jumped to 26.7, compared to March’s reading of 18.1. The data was far better than expected, as economists had been looking for a reading of 10.3 this month.
“Manufacturing activity in the region continued to grow overall, according to the firms responding to the April Manufacturing Business Outlook Survey. The survey’s indicators for general activity, new orders, and shipments all moved higher this month. However, the employment index fell and turned negative, suggesting overall declines in employment,” the report said.
Although gold prices have pushed back above $4,800 an ounce, they have not seen any significant follow-through buying. Spot gold last traded at $4,815.90 an ounce, up 0.5% on the day.
Looking at the components of the report, the new orders index jumped to 33.0, up from the previous reading of 8.6. At the same time, the shipments index rose to 34.0, up from March’s reading of 22.2.
However, the report also noted that the labor market continues to struggle. The number of employees index fell to -5.1, down from March’s reading of 0.8.
The increase in headline activity is also driving inflation pressures higher. The prices index jumped to 59.3, up from the previous reading of 44.7.
