(Kitco News) Gold prices fell as January’s Institute for Supply Management’s headline manufacturing index disappoints, contracting for the third month in a row.
Last month’s ISM manufacturing index was 47.4% against the consensus forecast of 48%. It was down 1 percentage point from 48.4% in December.
“Manufacturing PMI® This figure is the lowest since May 2020 when it hit a seasonally adjusted 43.5%,” the report said.
Readings above 50% on such a diffusion index imply economic growth and vice versa. The higher or lower the metric is above or below 50%, the greater or lesser the percentage change.
The employment index fell by 0.2 points to 50.6% in January, but remained in expansion territory. The new orders index shrank to 42.5% from 45.1% and the production index fell to 48% from 48.6%.
Andrew Hunter, senior U.S. economist at Capital Economics, said the decline in manufacturing activity supports predictions that the U.S. economy will soon slip into recession.
“The headline drop was even more severe than the December drop, throwing cold water on some commentators’ claims that the sector was on the brink of recovery,” Hunter said. “Notably, the index is now below the low point reached during the manufacturing downturn of 2015-16, the weakest since the global financial crisis, excluding the pandemic.”
The gold price fell slightly after the release, ending April’s Comex gold futures contract at $1,941.30, down 0.21% on the day.
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