Gold Rose After US Manufacturing Miss

Gold prices are see a modest boost Monday following a drop in momentum in the U.S. manufacturing sector, according to the latest data from the Institute for Supply Management (ISM).

The ISM said its Purchasing Managers Index weakened in April, falling to a reading of 54.8%, following March’s reading of 57.2%.



According to consensus forecasts, economists were expecting to see a modest fall to 56.6%. Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.

Ahead of the report, gold was trading in negative territory with the market rallying back to unchanged levels following the data. June Comex gold futures last traded at $1,268 an ounce.

After last week’s disappointing gross domestic product report, which showed that the U.S. economy grew by 0.7% in the first quarter, economists say they will be paying close attention to second quarter data to see if the weak growth trend will continue.

The components of the report showed mixed strength in the manufacturing sector. The New Orders Index fell to 57.5% in April, compared to March’s reading of 64.5%. At the same time the Production Index rose to 58.6%, up 1 percentage point from March.

Looking at the labor market, the Employment Index dropped to 52%, down 6.9 percentage points compared to March’s reading of 58.9%.

Inflation was relatively benign last month with the Prices Index falling to 68.5%, down from the previous reading of 70.5%.

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.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza