(Kitco News) – The gold market is struggling to maintain modest gains after stronger than expected momentum in the U.S. service sector, according to the latest data from the Institute for Supply Management (ISM).
The ISM on Friday reported its services sector PMI at 69.1% in November, up sharply from the October reading of 66.7%. Consensus forecast called for a reading of 64.9%.
The report says that this is a new record for the service sector index and that it is the fifth time that it has reached a new record this year.
“In November, record growth continued for the service sector, which has grown in the last 142 months except two. Demand continues to exceed supply which has been affected by capacity constraints, labor and material shortages and logistical challenges. It has also caused demand-driven inflation which is affecting general business conditions, ”said Anthony Nieves, chairman of the ISM Services Firms Inquiry Committee.
The gold market, struggling to find new bullish momentum, manages to maintain critical support levels following the latest economic data. February gold futures last traded at $ 1,770.70 an ounce, up 0.45% on the day.
The components of the report showed widespread growth across the service sector. The report says the business activity index reached 74.6, down from 69.8 in October. At the same time, the index of new orders remained stable at 67.0.
The report also showed positive dynamics in the labor market. The employment index reached 56.5, up from 51.6 in October.
Negative for the gold market, the report also noted that inflation, while still high, may have peaked. The price index fell to 82.6%, from 82.9% in October.
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