Gold Prices Hit Session Highs Following 4.4% Drop In U.S. Durable Goods Orders
(Kitco News)- Weaker-than-expected U.S. manufacturing sector data is keeping a bid under gold prices, which hit session highs following the numbers.
Thursday, the U.S. Census Bureau said that new durable goods orders fell by $11.5 billion or 4.4% to $248.5 billion, in October, down from up from September's increase of 0.7% and significantly missing expectations. Consensus forecasts were calling for an a drop of 2.2%.
Meanwhile core durable goods, which strips out the volatile transportation sector was also weaker-than-expected, increasing 0.1% last month. Consensus forecasts were calling for a 0.4% increase.
The gold market was seeingmodest gains ahead of the report and have added to its rally, hitting session highs in initial reaction to the data. December gold futures last traded at $1.227.30 an ounce, uup 0.50% on the day.
Gold is benefiting from growing risk-off sentiment infinancial markets as investors move out of falling equity markets and into moredefensive assets. Economists said that the latest manufacturing data could addto pessimism in the marketplace.
The volatile headline figures saw its biggest decline in 15months.
Katherine Judge, senior economist at CIBC World Markets saidthat the weak durable goods numbers does not bode well for fourth-quartereconomic growth.
“The details suggest that businessinvestment has started Q4 on shaky footing,” she said. “That suggests that tax cuts and the accelerated depreciationprovision in the TCJA only gave a temporary lift to business investment, andthat's now fading.”
By Neils ChristensenFor Kitco News
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