Gold Steady After US ISM non-manufacturing Drop

Gold prices are holding steady near their session highs following a drop in momentum in the service sector, according to the latest data from the Institute of Supply Management (ISM).

Monday, the ISM said its Non-manufacturing Purchasing Managers Index showed a reading of 56.9% in May, down from April’s reading of 57.5%. The drop was slightly below expectations as consensus forecasts were calling for a reading of 57.1%.

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 below a six-week high and were relatively unchanged in initial reaction. August Comex gold futures last traded at $1,283.30 an ounce, up 0.24% on the day.

Looking at the components of the report, the business activity index fell to 60.7%, down from April’s reading of 62.4%; at the same time the new orders index fell to 55.7, compared to the previous reading of 63.2%.

via Kitco

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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