(Kitco News) – Gold prices are holding steady gains and approaching $ 1,800 an ounce even as manufacturing momentum slows slightly, according to the latest data from the Institute for Supply Management (ISM).
On Monday, the ISM said its manufacturing index posted a reading of 60.7% for April, down from the March reading of 64.7%. The data missed expectations as the consensus forecast called for a reading of around 65.0%.
““ The manufacturing economy continued to expand in April. Members of the Inquiry Committee reported that their businesses and suppliers continue to struggle to meet increasing demand rates due to the impacts of the coronavirus (COVID-19) limiting the availability of parts and materials, ”said Timothy Fiore, President of the ISM Manufacturing Business Investigation Committee report.
“Recent record delays, large-scale shortages of essential raw materials, rising raw material prices and product transportation difficulties continue to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to parts shortages and difficulties in filling vacancies continue to be issues that limit the growth potential of manufacturing, ”he added.
Gold prices have seen some technical buying momentum for most of the morning and are holding gains in initial reaction to the latest economic data. June gold futures last traded at $ 1,793.50 an ounce, up 1.47% on the day.
Looking at some of the report’s evidence, the new orders index fell to 64.3%, down from the March reading of 68%. At the same time, the production index fell to 62.5%, down from the March level of 68.1%.
The data also showed weaker dynamics in the labor market. The employment index fell to 55.1%, down from the previous level of 59.6%.
Although momentum is slowing, inflation continues to rise. The report says the price index rose 89.6% from the previous reading of 85.6%.
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