Gold Prices Push Above 1% Gains Following ISM Data

New York (Jan 5)  Gold prices are holding on to 1% gains Thursday despite stronger-than-expected growth in the U.S. service sector.

The Institute for Supply Management said that its latest nonmanufacturing Purchasing Managers Index was unchanged in December, at 57.2; the reading was stronger than expected as consensus forecasts were calling for a modest drop to 56.6.

The index remains at its highest level in 13 months, according to reports.

Gold was holding on to strong gains ahead of the report and is now trading near session highs; February gold futures last traded at $1,180 an ounce, up 1.26% on the day.

Despite the stronger-than-expected reading in the headline data, the components of the index were relatively mixed.

The new business index dropped to 61.4% last month, down from November’s reading of 61.7%. At the same time the new orders index dropped to 61.6%, up from last month’s reading of 57%.

The closely watched employment index showed a reading of 53.8% in December, compared to November’s reading of 58.2%.  This could put some downward pressure on Friday’s employment report as many economists this component as a predictor for last month’s job gains.

Source: KitcoNews