(Kitco News) - The gold market continues to hold critical support above $4,000 an ounce, but steady activity in the U.S. services sector highlights the ongoing challenges for the precious metal, as a resilient economy and persistent inflation give the Federal Reserve room to maintain its tightening bias.
The Institute for Supply Management (ISM) announced Wednesday morning that its Services Purchasing Managers Index came in at 54.5 in October, down slightly from 54.9 in September. The data was modestly weaker than expected, as economists were looking for a roughly unchanged reading of 54.8.
Although momentum in the services sector continues to slow, activity remains in expansion territory. Readings above 50 in such diffusion indexes signify economic growth, while readings below 50 indicate contraction. The farther an indicator is above or below 50, the greater the rate of expansion or contraction.
“Fifteen industries indicated growth in October, two more than the previous month, while two reported contraction, two fewer than in September. The October Services PMI reading of 54.5 percent is 0.2 percentage point above the 12-month average of 54.3 percent,” said Steve Miller, Chair of the ISM Services Business Survey Committee.
The gold market is not seeing any significant reaction to the latest economic data. Spot gold last traded at $4,032.70 an ounce, up more than 2% on the day.
