Gold prices oscillating around $1900 as Philly Fed survey beats expectations to turn positive in August

NEW YORK (August 17) The gold market is trading on both sides of the key $1,900 level with neither bulls nor bears able to establish a clear direction after the Philadelphia Federal Reserve said its manufacturing sector survey surged dramatically into positive territory.

Thursday, the regional central bank said its manufacturing business outlook for August was much improved, climbing back into expansionary territory to 12, compared to July's reading of -13.5. The data significantly beat expectations as economists were looking for only modest improvement to a -10 reading.

August is the first month the survey has given a positive reading after eleven consecutive months in negative territory.

The gold market is not seeing a massive reaction to the latest surprising economic data. Spot gold last traded at $1,898.90 an ounce, down 0.37% on the day, and has been trading only slightly above or below $1,900 since the minutes before the 8:30 AM EDT release.

The components of the index were mixed. The New Orders Index saw massive improvement, rising to 16 from July's reading of -15.9, while the Shipments Index also turned positive, improving to 5.7 from the previous reading of -12.5.

On the other hand, the labor market component continued to worsen, with the Employment Index dropping to -6.0, down from -1.0 in July.

The report also noted a rise in inflation pressures, which should be a concern for Fed watchers. The Prices Paid Index increased to 20.8, well up from July's reading of 9.5.

“The survey’s indicators for general activity, new orders, and shipments were all positive for the first time since May 2022,” the Philly Fed wrote in the report. “The price indexes remained near long-run averages. Expectations for growth over the next six months were less widespread, as most of the survey’s future indexes remained positive but declined.”

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