Gold prices see slight rebound after disappointing US PMI data in Flash

(Kitco News) – The gold market recovered some of its losses as preliminary data were less optimistic than expected in the manufacturing and services sector.

On Thursday, IHS Markit announced that its index of purchasing managers in the United States manufacturing sector for August had dropped to 49.9, down from 50.4 in July. Economists expected a reading of 50.5. The report says the manufacturing climate has fallen into contraction territory and is at its lowest level in nearly 10 years.

At the same time, the company's service-sector PMI fell to 50.9 from 53.0 in July. Economists predicted that the index would be at 52.9. The climate in the services sector is at its lowest for three months, the report said.

Any monthly reading greater than 50 points indicates an expanding area, while any lower reading indicates a contraction in activity.

Gold prices were subject to significant selling pressure but managed to bounce back to their lows. Although still down, prices continue to maintain critical support in excess of $ 1,500 per ounce. The latest December gold futures traded at $ 1.5213.30 an ounce, down 0.16% on the day.

According to some economists, the collapse of US PMI data in the moment raises the threat of a recession.

"Data from the August survey clearly indicate that economic growth continued to slow in the third quarter." Manufacturing and service manufacturing SMIs remain much lower than at the beginning. of 2019 and collectively indicate an annualized GDP growth of about 1.5%, "said Tim Moore, associate director of economics at IHS Markit. "The most worrying aspect of the latest data is the slowdown in new business growth, which has reached its lowest point in a decade, due to a sharp slowdown in the service sector . "