Gold Prices Remain On Defensive Following Mixed Regional Manufacturing Data
(Kitco News)-Gold pricesremain under pressure as regional manufacturing data showed mixed growth inMarch, according to two regional Federal Reserve banks.
The NewYork Federal Reserve said that their manufacturing sectors saw strong growththis month. But at the same time, the PhiladelphiaFederal Reserve reported slightly weaker than expected growth in the sector.
“Firmsremained optimistic about future business conditions, though less so than lastmonth, and capital spending plans remained strong,” the New York Fed said inits report.”
The generalbusiness conditions index in the Empire State manufacturing survey increasedto a reading of 22.5 in March, compared to the February reading of 13.1, accordingto the New York Fed. Economists were expecting to see an increase to 14.9.
Meanwhile, thecurrent General Activity Index in the Philadelphia Federal Reserve’smanufacturing business outlook survey fell to 23.8 in March, down compared tothe February reading at 25.8. Economists were expecting to see a modest drop to23.1.
“Resultsfrom the March Manufacturing Business Outlook Survey suggestcontinued growth for the region’s manufacturing sector. Although the survey’sindex for general activity moderated, the indexes for new orders and shipmentsimproved,” the Philly Fed said in its report.
Gold wasunder pressure ahead of the data, weighed down by a stronger U.S. dollar. Theyellow metal has lost only a little bit more ground in initial reaction. Aprilgold futures last traded at $1,320.30 an ounce, down 0.40% on the day.
Looking atthe components of the New York Federal Reserve survey, the New Orders Index increasedto 16.8, up from February's reading of 13.5; at the same time the ShipmentsIndex increased to 27.0, up from 12.5 in February.
However,the labor market lost momentum in March with the Employee Index dropping to9.4, down from February's reading of 10.9.
Positivefor the gold market, inflation pressures appear to be rising with the PricePaid Index increasing to 50.3, up from February's reading of 48.6.Traditionally, gold is seen as a hedge against inflation.
Looking atthe Philly Fed Survey, the New Order Index increased to 35.7, up from February'sreading of 24.5; at the same time shipments increased to a reading of 32.4, upfrom the February level of 15.5.
The labormarket in the manufacturing sector was relatively static last month with theNumber of Employee Index increasing to 25.6, up from February's reading of25.2.
The survey also showed weak inflation pressureswith the Prices Paid Index falling to 42.6, down from February's reading of45.0.
By Neils ChristensenFor Kitco News
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