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Home Gold News Gold Prices Slip Amid U.S. Manufacturing Contraction

Gold Prices Slip Amid U.S. Manufacturing Contraction

by anna

The gold market has struggled to gain sustainable momentum as the U.S. manufacturing sector continues to contract. On Monday, the Institute for Supply Management (ISM) reported that its Manufacturing Purchasing Managers Index (PMI) dropped to 48.5% in June, down from 48.7% in May, falling short of the anticipated increase to 49.2%.

“U.S. manufacturing activity remained in contraction at the end of the second quarter. Demand was weak, output declined, and inputs stayed accommodative,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.

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Following the release of this data, gold faced significant selling pressure, with August gold futures trading near session lows at $2,331.30 per ounce, down 0.30% on the day.

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The ISM report detailed varied weaknesses within the manufacturing sector. Notably, the New Orders Index rose slightly to 49.3%, up from 45.4% in May. However, the Production Index fell to 48.5% from 50.2% in the previous month. The labor market also showed signs of slowing, with the Employment Index decreasing to 49.3% from 51.1%.

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Despite the contraction, weaker manufacturing activity has helped ease inflationary pressures. The Prices Index dropped to 52.1% from June’s reading of 57%, indicating a slowdown in price increases.

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This combination of factors underscores the challenges facing the manufacturing sector and its impact on gold prices, which continue to hover without clear direction amidst economic uncertainty.

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