Gold prices holding gains as U.S. ISM manufacturing sector remains in contraction territory at 47.7, rising in line with expectations

NEW YORK (March 1) The gold market is holding in positive territory  as U.S. manufacturing data shows that inflation continues to heat up according to the latest report from the  Institute for Supply Management.

Wednesday, the ISM said that its manufacturing Purchasing Managers Index remained in contraction territory in February rising to 47.7%, up slightly  from January’s reading of 44.7%. The data was in line with consensus estimates.

Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.

However, according to some commodity analysts, the gold market is paying closer attention to the ISM inflation data. The report said that its Prices index rose to a reading 51.3%,  This is the first time the U.S. manufacturing sector has moved into expansion territory in four months.

Some analysts have said that rising prices in the manufacturing sector could mean the Federal Reserve won’t have the ability to control inflation, even as it continues to aggressively tighten its monetary policies.

April gold futures last traded at $1,845 an ounce, up 0.45% on the day.

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