Gold prices struggle as Empire State Survey hits one-year high

NEW YORK (November 17) The gold market remains stuck below $4,100 and could face further downside pressure amid improved U.S. manufacturing data, according to the New York Federal Reserve.

The regional central bank reported Monday that its Empire State Manufacturing Survey jumped to 18.7 in November, up from October’s reading of 10.7. The data significantly beat expectations, as economists were looking for a print of 6.1.

Activity in New York’s manufacturing sector has risen to its highest level in a year and marks its fourth positive reading in the last five months.

“Manufacturing activity grew at a solid pace in New York State, with the survey’s headline index reaching its highest level since last November. Both employment levels and hours worked rose modestly. While firms expect conditions to improve, optimism for the future dipped,” said Richard Deitz, Economic Research Advisor at the New York Fed, in the report.

The gold market is not seeing any significant reaction to the better-than-expected economic data; however, the precious metal continues to struggle to find its footing as investors take profits after prices failed to hold gains above $4,200 last week. Spot gold last traded at $4,067.20 an ounce, down 0.33% on the day.

The report showed broad improvement in the components of the index, with gains in the labor market and weaker inflation pressures. The New Orders Index rose to 15.9, up from the previous reading of 3.9; meanwhile, the Shipments Index increased to 16.8, up from October’s reading of 14.4.

The region’s labor market saw a modest improvement, with the Number of Employees Index rising to 6.6, up from October’s reading of 6.2.

Finally, inflation pressures appear to be easing, with the Prices Paid Index falling to 49.0, compared to the previous reading of 52.4.

KitcoNews