Gold Prices Hold Solid Gains As Manufacturing Sentiment Gains In November

New York (Dec 3)  Gold prices are holding on to solid gains, but the market is seeing little reaction to stronger-than-expected manufacturing data

Monday, ISM said that its manufacturing index increased to a reading of 59.3% in November, up from October’s reading of 57.7% and beating estimates. Consensus forecasts were calling for a reading of 57.5%.

"US manufacturing activity accelerated in November, reversing most of the dip seen in the prior month," said Katherine Judge, senior economist at CIBC World Markets. "The pickup was driven by broad-based improvement."

Although economic data is having little impact on gold prices, as the market benefits from weakening momentum in the U.S. dollar. February gold futures last traded at $1,236.90 an ounce, up nearly 1% on the day.

While the headline sentiment indictor expanded as a faster pace than expected, inflation remains tame with the ISM manufacturing prices falling to a reading of 60.7%, down from 71.6%. Economists were expecting to see a modest drop to 70.1%.

"Prices pressure continues, but at notably lower levels than in prior periods. The manufacturing community continues to expand, with November adding positively to the three-month rolling PMI average," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.

The components of the report showed broad-based strength. The new orders index increased to 62.1%, up from October’s reading of 57.4%; meanwhile, the production index increased to 60.6%, up from October’s reading of 59.9%.

The labor market also showed positive growth with the employment index increased to 58.4%, up from October’s reading of 56.80%