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May 26, 2024
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Precious Metals

Gold prices see muted reaction as Philly Fed survey remains roughly unchanged at -10.6

(Kitco News) – Manufacturing activity in the U.S. continues to slow, with another region reporting weakness within the sector.

Thursday, the Philadelphia Federal Reserve said its Manufacturing Business Outlook Survey remained in contraction territory at -10.6, down only slightly from December’s reading at 10.5.

While conditions were relatively unchanged from the previous month the data was significantly weaker than expected. According to consensus forecasts, economists were looking for a modest recovery to -6.6.

The gold market is not seeing much reaction to the disappointing economic data as prices continue to hold support above $2000 an ounce. February gold futures last traded at $2,012 an ounce, up 0.27% on the day.

The report noted that this is the 18th negative reading in the past 20 months.

“Manufacturing activity in the region continued to decline overall, according to the firms responding to the January Manufacturing Business Outlook Survey,” the report said. “More than 26 percent of the firms reported decreases, exceeding the 16 percent reporting increases; 52 percent of the firms reported no change in current activity.”

The components of the report remained in solidly negative territory. The New Orders Index showed a reading of -17.9, up from December’s reading of -22.1. At the same time, the Shipments Index was -6.2, up from the previous reading of 11.2.

The region’s manufacturing labor market also remained weak, even as it rose from December. The Number of Employees Index rose to -1.8, up from the previous reading of -2.5.

Although activity remains weak, inflation pressures are also starting to drop, which is positive for the gold market in the near term. The report said that the Prices Paid Index fell to 11.3, down from December’s reading of 24.3.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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