(Kitco News) – The gold market continues to rally above $2,050 an ounce, but there is no noticeable bullish momentum, even as U.S. manufacturing has lost further momentum since the start of the year.
On Friday, the Institute for Supply Management (ISM) announced that the manufacturing business index fell to 47.8% in February, compared to 49.1% in January. The data was weaker than expected, as the consensus forecast was for a slight improvement to 49.5.
Timothy R. Fiore, CPSM, CPM, chair of the ISM Manufacturing Study Committee, said, “U.S. manufacturing continues to contract (and is lower than in January due to slowing demand, slowing production, and easing inputs). “The pace was fast.” In the report.
A value above 50% of such a penetration index signifies economic growth and vice versa. The more the indicator goes above or below his 50%, the larger or smaller the rate of change will be.
Gold prices have managed to maintain gains above key resistance points. But it has struggled to attract significant follow-through purchases. Gold futures for April contract rose 0.28% on the day, trading at $2,060.50 per ounce.
Components of the report showed widespread weakness in the US manufacturing sector. According to the report, the new orders index was 49.2, down from 52.5 in January. At the same time, the production index decreased to 48.4 from 50.4 previously.
The report also highlighted weakening labor market momentum. The employment index was 45.9, down from 47.1 in January.
The report also noted that inflation pressures appear to be stabilizing. The price index remained relatively unchanged at 52.5, down slightly from the 25.9 reported in January.
Some analysts say disappointing manufacturing data could create safe-haven demand for precious metals as it highlights the threat of a recession.
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