Gold Prices Holding On To Modest Gains Following In-Line Flash PMI Data
(Kitco News)- Thegold market remains unchanged on the day, holding on to modest gains, hoveringnear last week's 12-month low following positive preliminary manufacturing andservice-sector sentiment data
Theflash U.S. manufacturing Purchasing Managers Index for July expanded relativelyin line with expectations, coming in at 55.4 in comparison to June's revisedreading of 55.4, research firm IHS Markit said in its latest report. Economistswere expecting a reading around 55.1.
Atthe same time, the firm's service sector PMI reading was at 56.2 down slightly comparisonto June's reading of 56.5. Economists were projecting the index to remainunchanged on the month.
Anymonthly reading above 50 points to an expanding sector, while anything belowthat shows contraction in activity.
"U.S. private sector companies experienced a robustrise in overall business activity during July,supported by an improving economic backdrop andanother sharp upturn in incoming new work," the report said.
Goldfutures have seen little reaction to the preliminary data as the market holdson to modest gains. August gold futures last traded at $1,228.20 an ounce, up0.22% on the day. Overall the precious metal remains sensitive to strongmomentum in the U.S. dollar; gold prices are hovering just above last week's12-month low.
According to the report, the sentiment growth in the manufacturingsector was the strongest since May 2016. Meanwhile the service sector saw itsslowest gains since April.
The report noted that solid domestic demand is boostingmanufacturing growth. Domestic growth will help the sector combat negative internationaleffects of a stronger U.S. dollar.
Despite the positive growth, the report did not that there are growing concernsrelated to the U.S. government’s trade policies.
“Trade frictions have clearly become a majorcause of concern, especially among manufacturers. Firms have becomeincreasingly worried about the impact of tariff and trade wars on demand,prices and supply chains,” said Chris Williamson, Chief Business Economist atIHS Markit. “July saw the steepest rise in prices charged for goods andservices yet recorded by the surveys as firms passed rising costs on tocustomers, in turn frequently linked to tariffs.”
By Neils ChristensenFor Kitco News
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