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(Kitco News) – Momentum in the gold market remains strong as prices remain below $ 1,900 an ounce, following slightly weaker-than-expected sentiment in the manufacturing sector.
On Friday, IHS Markit said its July manufacturing purchasing managers’ index for July rose to a reading of 51.3, up from June’s reading of 49.8. However, the data was slightly weaker than expected; Economists expected to see a reading of 52.
At the same time, the PMI reading for the company’s services sector increased to 46.6, compared to the revised reading of June 47.9. Economists predicted the index would hit 51. IHS said this is the lowest sentiment reading in the history of the survey.
The report noted that sentiment in both the manufacturing and service sectors is at its highest level in six months.
The data has had little impact on gold prices as they remain close to new nine-year highs, just below $ 1,900 an ounce. August gold futures last traded at $ 1,898.40 an ounce, 0.44% higher on the day.
Although the US economy appears to stabilize four months after being devastated by the COVID-19 pandemic, Chris Williamson, chief business economist at IHS Markit, said the lack of new economic growth is disappointing.
The report noted that new businesses were hit by reports of challenging demand conditions, especially among service providers, and some struggled with the reintroduction of blocking measures.
“A renewed acceleration in the loss rate of new businesses raises concerns that demand will falter. Many companies, especially in the consumer-oriented areas of the service sector, linked falling sales with reimposed blocks, ”said Williamson.
Although sentiment is increasing, Williamson added that it is being tempered by the growing uncertainty surrounding the political landscape and the further spread of the COVID-19 pandemic.
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