Gold prices remain near 10-day highs as ISM PMI rises in March

The Institute for Supply Management (ISM) announced on Wednesday that its Manufacturing Purchasing Managers Index rose to 52.7 in March, compared to February’s reading of 52.4. The headline number beat expectations, as economists had been looking for continued contraction in the manufacturing sector, with a reading of 52.3.

A reading above 50 indicates growth in the manufacturing sector, while a reading below 50 signifies contraction.

The gold market is not seeing much reaction to the headline numbers. Spot gold last traded at $4,744.80 an ounce, up 1.65% on the day.

While the headline number was better than expected, the components of the report were not as positive. The New Orders Index dropped to 53.5, down from February’s reading of 55.8. At the same time, the Production Index rose to 55.1, up from the previous level of 53.5.

The manufacturing labor market also lost some momentum, with the Employment Index falling to 48.7 from the previous level of 48.8.

Finally, the report also highlighted a sharp rise in inflation pressures. The Prices Index jumped to 78.3, up from 70.5 in February.

Although the report showed expanding activity in the U.S. manufacturing sector for the 17th consecutive month, Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, said there is growing uncertainty within the sector.

“This month also marks the first report with panelists citing the Iran war as a new impact on their business, along with ongoing uncertainty around U.S. economic policy, despite the recent Supreme Court ruling striking down International Emergency Economic Powers Act (IEEPA) tariffs. In March, 64 percent of comments overall were negative. Among the negative comments, about 20 percent cited tariffs and about 40 percent cited the war in the Middle East,” she said.