Gold prices holding gains as ISM service sector improves in December

New York (Jan 7)  Gold price are holding on to its recent gains even as sentiment in the U.S. service sector improved in December, according to the latest data from the Institute for Supply Management (ISM).

Tuesday, the ISM said its nonmanufacturing index showed a reading of 55% for December up from November’s reading of 53.9%. The data was stronger than expected as consensus forecasts were calling for a reading of 54.5%

The economic data is not having much impact on gold as price continue to hover near their highest level since April 2013. February gold futures last traded at $1,571.40 an ounce, up 0.14% on the day.

Sentiment in the nonmanufacturing is at its highest level since September. Looking at the components of the report, ISM said that the Manufacturing Business Activity Index rose to 57.2%, up compared to the November reading of 51.6%.

However, the labor market lost some momentum, the Employment Index dropped to 55.2% in December, down from the November reading of 55.5%.

“The respondents are positive about the potential resolution on tariffs. Capacity constraints have eased a bit; however, respondents continue to have difficulty with labor resources,” said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

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