Spot gold at $4,985/oz after ISM Services PMI holds at 53.8 in January

NEW YORK (February 4) The U.S. service sector held steady last month with all four major subindexes in remaining expansionary territory, but price pressures are also ticking higher, according to the latest data from the Institute for Supply Management (ISM).

The ISM announced on Wednesday morning that its Services Purchasing Managers Index was 53.8 in January, the same as December’s downwardly revised reading. The data was slightly better than expected, as economists were looking for a reading of 53.5. January’s reading represented the index’s 19th straight month of  expansion after ISM’s most recent seasonal adjustments

Readings above 50 in such diffusion indexes signify economic growth and vice versa. The farther an indicator is above or below 50, the greater or smaller the rate of change. In September, the Services PMI reading of 50 percent was at the breakeven point between expansion and contraction for the first time since January 2010.

After setting a session high of $5,091.93 per ounce just before 3 am EST, gold prices continued to trade near the middle of their daily range following the 10 am release. Spot gold last traded at $4,985.70 per ounce for a gain of 0.79% on the daily chart.

“January’s Services PMI is the result of a second month in a row of all four subindexes being in expansion territory,” Miller noted. “December 2024 and January 2025 featured similar subindex performance, but in the last two months, the PMI is stronger year over year by an average of 0.7 percentage point. The Employment Index expanded for a second straight month for the first time since January and February 2025. These are positive signs for continued expansion; however, the closely watched Prices Index continues to creep up, now 0.2 percentage point above its 12-month seasonally adjusted average of 66.4 percent.”

Miller said the ISM also received increased commentary from respondents on tariff impacts and uncertainty in January, which he said could be due to annual contract renewals and geopolitical tensions. 

“Gasoline and diesel fuel continued to be cited as commodities down in price,” he said. “With the highest Business Activity and Supplier Deliveries index readings since October 2024, indicating higher business activity levels and slower supplier deliveries, whether pricing increases will stick or expand needs to be closely watched.”

KitcoNews