Gold prices steady after New York Fed survey falls to -4.6 in October
NEW YORK (October 16) Gold prices are trading in the middle of the daily range after the latest data from the New York Federal Reserve showed worsening conditions within its region's manufacturing sector.
The regional central bank said Monday that its Empire State manufacturing survey's general business conditions index declined to -4.6 in October, down from September's positive reading of 1.9.
The data was still slightly stronger than expected, as consensus forecasts were looking for the headline index to fall further into contractionary territory to -7. This is only the second month the index has been negative since May, after August posted a reading of -19.
The spot gold market saw a small move upward ahead of the release, rising from $1,915.12 shortly after 8 am EDT to $1,923.53 in the minutes before, but it has since pulled back to the middle of its range on the session. Spot gold last traded at $1,916.08 an ounce, down 0.74% on the day.
The report highlighted declines throughout the sector. The New Orders Index dropped nine points to -4.2, down from September’s reading of 5.1. The Shipments Index also fell 11 points to 1.4, down from the previous month’s 12.4 level.
The report noted some strength in the labor market, with the Number of Employees Index improving to 3.1, up from September's reading of -2.7.
The report also noted persistently elevated inflation pressures, which have been negative for gold as it forces the Federal Reserve to maintain its aggressive monetary policies. The report said its Prices Paid Index held steady once again at 25.5, virtually unchanged from September’s level of 25.8.
The Future Business Conditions index pulled back slightly to 23.1 after reaching 26.3 in September, its highest level in more than a year, indicating that firms are still optimistic about their future conditions.
“However, less than half of respondents expect conditions to improve over the next six months,” the report said. “New orders and shipments are expected to increase, though less so than last month, and employment is expected to grow.”
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