Gold price holding support above $5,000 after Empire State Survey drops to -0.2 in March

NEW YORK (March 16) The gold market is holding critical support levels but is not seeing any significant bullish momentum, even as the U.S. manufacturing sector continues to struggle, according to the latest report from the New York Federal Reserve.

The regional central bank reported Monday that its Empire State Manufacturing Survey fell more than expected into contraction territory, with a -0.2 print in March, compared to February’s reading of 7.1. The data missed expectations, as economists were looking for a print of 4.0.

“Manufacturing activity held steady in New York State in March. Delivery times lengthened and supply availability worsened slightly. Firms remained optimistic about the outlook,” said Richard Deitz, Economic Research Advisor at the New York Fed, in the report.

The gold market is not seeing much reaction to the disappointing economic data, as the precious metal starts the new trading week in neutral territory. Spot gold last traded at $5,019 an ounce, nearly unchanged on the day.

Looking beyond the disappointing headline, the report's components were fairly mixed, with new orders and employment improving. At the same time, inflation pressures appear to be easing.

The New Orders Index rose to 6.4, compared to the previous reading of 5.8; however, the Shipments Index dropped sharply to -6.9, down from -1.0 last month.

In positive news for the labor market, the Number of Employees Index rose to 5.8, up from 4.0 in March.

Slowing activity in the manufacturing sector is easing price pressures. The Prices Paid Index dropped sharply to 36.6, down from February's reading of 49.1.

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