(Kitco News) - Gold is coming off session lows after the latest data showed the U.S. manufacturing sector performing below expectations last month, while prices held steady in August.
The Institute for Supply Management (ISM) announced on Tuesday that its Manufacturing Purchasing Managers Index fell to 54.6 in August, after posting a reading of 55.6 in July. The headline number was lower than expected, as consensus forecasts looked for a reading of 55.3.
“In August, U.S. manufacturing activity remained in expansion territory, though it has lost ground in a number of key measures — namely, the New Orders, Backlog and Imports indexes,” said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee. “Of the five subindexes that make up the PMI, the only one that grew faster than last month was Supplier Deliveries (up 0.4 percentage point), indicating a continuing slowdown of the supply chain.”
Spot gold fell to a session low of $4,326.27 shortly after 9 am ET, but was rising off its lows following the 10 a.m. ET release, and last traded at $4,366.69 per ounce for a loss of 1.86% on the day.
The components of the report showed declines across key areas, including Production, New Orders and Employment, while Prices held steady at July’s elevated level.
“The New Orders Index expanded for the eighth consecutive month after four straight readings in contraction, registering 53.7 percent, down 3 percentage points compared to July’s figure of 56.7 percent,” Spence noted. “The August reading of the Production Index (58.3 percent) is 0.2 percentage point lower than the 58.5 percent recorded in July. The Prices Index remained in expansion (or ‘increasing’ territory), registering 71.1 percent, the same reading as July. The Backlog of Orders Index registered 51.8 percent, down 3.2 percentage points compared to the 55 percent recorded in July. The Employment Index reading of 51.2 percent is down 1.6 percentage points from July’s figure of 52.8 percent.”
