Gold Prices Up Following Slightly Weak ISM Manufacturing Print

New York (Dec 1)  Gold remains quiet Friday morning, seeing modestly higher prices following slightly weaker-than-expected U.S. manufacturing data.

Friday, Institute for Supply Management said that its headline manufacturing index fell to a reading of to 58.2% in November, following October’s reading of 58.7%. According to consensus forecasts, economists were expecting to see a reading of 58.4%.

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.

Gold prices were relatively flat on the day ahead of the report and are only modestly higher in initial reaction. February gold futures last traded at $1,278.10 an ounce, up 0.11% on the day.

Looking at some components of the report, the New Orders Index rose to 64%, up from October's reading of 63.4%. At the same time, the Production Index rose to 63.9%, up from the previous level of 61.0%.

The labor market showed slower momentum last month with the Employment Index falling to a reading of 59.7%, down from the previous level of 59.8.

Inflation was also muted last month with the Price Index dropped to 65.5%, down from October's reading of 68.5%.

Royce Mendes, senior economist at CIBC World Markets, shrugged of the slightly disappointing data, noting that the manufacturing sector has been on a winning streak for most of the year.

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