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(Kitco News) – Gold prices remain under pressure, testing support just above $ 1,750 an ounce as the US services sector saw stronger than expected momentum in September, according to the latest data from the Institute for Supply Management (ISM).
On Tuesday, the ISM said its non-manufacturing index posted a reading of 61.9% last month, up from the August reading of 61.7%. The data was stronger than expected, with consensus forecast calling for a reading of around 59.9%.
Better than expected economic data has a small impact on gold prices as it continues to trade near session lows. December gold futures last traded at $ 1,753.30 an ounce, down 0.80% on the day.
Adam Button, chief currency strategist at Forexlive.com, noted that the positive surprise of the latest ISM data is pushing both the U.S. dollar and bond yields higher, both of which are negative factors for the currency market. gold.
Looking at some of the components of the report, the trade / production activity index rose to 62.3%, from 60.1% in August. At the same time, new orders reached 63.5%, compared to 63.2% previously.
However, the service sector labor market lost momentum in the past month. The report says the employment index fell to 53.0, down from August’s level of 53.7%.
Labor market data has garnered a lot of attention lately as it is one of the factors the Federal Reserve is watching as it prepares to change its monetary policy and start cutting back on its monthly purchases of ‘bonds before the end of the year.
Positive for the gold market, the strength of activity in the services sector in the United States continues to fuel inflationary pressures. The report says the price index reached 77.5%, up from 75.4% in August.
Anthony Nieves, chairman of the ISM Service Firms Inquiry Committee, said 17 service sector industries grew last month; however, he added that although the service sector continues to grow, the economy continues to face headwinds.
“Ongoing challenges related to labor resources, logistics and materials affect the continuity of supply,” he said.
Disclaimer: The opinions 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 the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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