Gold Lower Despite Lower ISM non-manufacturing Index

The gold market is seeing little reprieve despite a bigger-than-expected decline in the U.S. service sector.

Wednesday. The ISM said that its non-manufacturing Purchasing Managers Index showed a reading of 55.2% in March, down from February’s reading of 57.6%. Consensus forecasts were calling for a slight drop, to a reading of 57.0%.

Readings above 50 are seen as a sign of economic growth; the farther an indicator is above or below 50, the greater or smaller the rate of change.

Ahead of the report, gold prices were hovering just above session lows. The market has been struggling following a stronger than expected private-sector employment report from payrolls processing company ADP. June Comex gold futures last traded at $1,244.80 an ounce, down 0.81% on the day.

Not only did the headline index show slower-than-expected growth in the service sector, but the reported showed broad-based weakness. Looking at the components of the report the business activity index dropped to 58.9%, down 4.7 percentage points from the previous reading at 63.6%; at the same time, the new orders index fell to 58.9%, compared to February’s reading of 61.2%.

The U.S. labor market also showed a decline with the employment index falling to 51.6%, down from 55.2% seen in February. Economists watch this component fairly closely as it could impact expectations for Friday’s nonfarm payrolls data. However, it appears that most economists are shaking off this drop and focusing on the ADP data that showed that 263,000 jobs were created in the U.S. last month.

via Kitco

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.