Gold Price Dips As Chicago PMI Jumps To 65.2 In September

New York (Sept 29)  Gold prices eased Friday after the headline index for the Chicago Business Barometer, widely known as the Chicago Purchasing Managers Index, rose to 65.2 in September from 58.9 in August.

This was the highest level for the index in three months and the second highest level in more than three years. Consensus forecasts called for a reading of 58.5.

Around 10:05 a.m. EDT, Comex December gold was trading $1.80 lower for the day to $1,286.90 an ounce. Two minutes ahead of the report, the metal was at $1,289.50.

“Optimism among firms about business conditions was bolstered in September after August’s flat showing, with each of the barometer’s sub-components strengthening,” according to the report. “A marked rise in order backlogs, up to a 29-year high, was among the month’s highlights.”

Adverse weather in parts of the country led some companies to stockpile goods as a precautionary measure, the report said. The Inventories indicator rose by 8.4 points to the highest level since March.

“After three consecutive monthly falls, the employment indicator returned to above-50 territory in September,” the report said. “Despite the rise, companies continued to cite difficulty in finding skilled workers, while there was evidence of firms hiring temporary staff and staff working overtime hours.”

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.

The report said the inflation indicator rose to the highest level since July 2011.

The Chicago report tends to be watched closely as a sign of strength in the Midwestern manufacturing sector and as a possible precursor to the Institute for Supply Management’s PMI for the entire nation, which is scheduled for release on Monday.

KitcoNews