Gold Price Unchanged As Sentiment Remains Strong In Service Sector
(Kitco News)- Gold prices were largely unchanged following strong-than-expectedmomentum in the U.S. service sector, according to the latest data from theInstitute of Supply Management (ISM).
Monday, the ISM said its Non-manufacturing PurchasingManagers Index showed a reading of 59.5% in February, down only slightly fromJanuary's reading of 59.9%. The drop was above expectations as consensusforecasts were calling for a reading of 58.9%.
"The majority of respondents' continue to be positive about business conditions and the economy," the repor said.
Readings above 50 are seen as a sign of economic growth; thefarther an indicator is above or below 50, the greater or smaller the rate ofchange.
Gold prices were under modest selling pressure ahead of thereport as investors took some profits off the table following a $20 rally latelast week. April gold futures last traded at $1,321.80 an ounce, down 0.12% onthe day.
While the headline numbers were slightly better thanexpected, the data shows that weakness in labor market is dragging down the servicesector. The employment index of the report is closely watched by economists asit is a predictor ahead of Friday’s official nonfarm payrolls report.
The ISM said that its Employment Index dropped to a readingof 55% in February,down 6.6 percentage points from the January reading of 61.6 percent.
“Thedecrease in the Employment Index possibly prevented an even stronger readingfor the NMI composite index,” the report said.
Lookingat the other components of the index, the Business Activity Index increased to62.8% last month, up 3 percentage points higher from the January reading of59.8%. Meanwhile, the New Orders Index increased to 64.8%, up from January'sreading of 62.7%.
Thereport noted that inflation pressures remain muted. The Prices Index dropped toa reading of 61% last month,m down from the January reading of 61.9%.
By Neils ChristensenFor Kitco News
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