Gold Prices Weaker Following 51.5 Reading In ISM PMI

New York (Oct 3)  Gold prices are back under modest pressure Monday following data that points to renewed momentum in the U.S. manufacturing sector.

Monday, the Institute for Supply Management said its Purchasing Managers Index pushed back into expansion territory in September, rising to a reading of 51.5%, following August’s reading of 49.4%.

According to consensus forecasts, economists were expecting to see a modest rise to 50.4%. 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.

Ahead of the report, gold was relatively flat and has managed to extend its losses; December gold futures last traded at $1,315.50 an ounce, down 0.12% on the day.

Looking at the components of the report, the new orders index rose to a reading of 55.1%, up from August’s reading of 49.1%; at the same time the rose to 52.8, up from August’s reading of 49.6.

Employment in the manufacturing sector saw an improvement last month; however the labor market for the sector remains in contraction territory. ISM said that its employment index rose to 49.7% last month, up from the previous reading of 48.3%.
Price pressures also continue to grow, albeit at a subdued pace; the price index last month was unchanged at 53.

Source: Reuters