Philly Fed survey can't derail gold's momentum
The gold market is once again holding its own above critical near-term support, even as the U.S. manufacturing sector appears to be more resilient than economists had expected, according to the latest regional data from the Philadelphia Federal Reserve.
The regional central bank said Thursday that its Manufacturing Business Outlook Survey for September came in at 37.8, down from last month’s five-year high of 47.4. The data were better than expected, as economists were looking for a reading of 31.3.
“Responses to the September Manufacturing Business Outlook Survey suggest overall expansion in the region’s manufacturing activity,” the report said. “The survey’s broad indicators for future activity continued to suggest expectations for growth over the next six months.”
The gold market is not seeing any significant reaction to the positive economic data. The precious metal continues to recover from Wednesday’s selloff after the Federal Reserve raised interest rates by 25 basis points and Federal Reserve Chair Kevin Warsh signaled that the central bank still has work to do to bring inflation down to its 2% target.
Spot gold last traded at $4,364.90 an ounce, up more than 2% on the day.
Although the Philly Fed survey was better than expected, broader manufacturing activity in the U.S. has been mixed. Earlier in the week, the New York Federal Reserve reported weaker-than-expected activity in its Empire State survey.
The components of the Philly Fed survey were down from August but still showed solid activity. The New Orders Index fell to 29.2, down from the previous reading of 30.1. Meanwhile, the Shipments Index remained unchanged at 27.7.
The report also showed a loss of momentum in the labor market, with the Number of Employees Index falling to 11.8 from 27.9 in August.
Inflation pressures also remained elevated, with the Prices Paid Index rising to 48.6 from 40.9 in August.
