Gold Prices Fall To Session Lows Following Surging Momentum In Philly Fed Survey
(Kitco News)- Gold remains is atsession lows following a report from the Philadelphia Federal Reserve highlightinggrowing momentum within the region's manufacturing sector.
Theindex for current general activity in the Philly Fed business outlook survey jumpedto 25.7, up from 19.9 in June. The consensus expectations compiled by variousnews organizations were for a reading around 21.6.
Readingsabove zero in diffusion indexes such as the Philadelphia Fed survey showeconomic expansion.
"All the broad indicators remained positive, with the general activity and new orders indexes improving this month," the report said.
Goldwas already weak going into the New York trading session due to overnightstrength in the U.S. dollar. August gold futures continued to trade near fresh 12-monthlows at $1,211.6 an ounce, down more than 1% on the day.
Looking at the components of the report, neworders saw a significant jump, increasing to a reading of 31.4, up from June'sreading of 17.9.
However, there was some weakness in the sector,particularly within the labor market. The report said that the number ofemployees index dropped to 16.8, downfrom June's reading of 30.4.
There was also some good news for gold investors as the report noted rising inflation pressures. The prices paid index jumped to 62.9, up from theprevious level of 51.8.
Manufacturing production is expected to remain strong through the summer, which is traditionally a slow period. In the survey’sspecial question firms were asked if they were scheduling plant shutdowns thissummer.
“Over 19 percent indicated that such slowdownswere scheduled this summer, down from 26 percent when the question was askedlast year,” the report said.
By Neils ChristensenFor Kitco News
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