(Kitco News) - After spending the early morning under pressure, volatility in the gold market has picked up with prices holding above $1,500 as sentiment in the manufacturing sector remained lackluster in October, according to the latest data from the Institute for Supply Management (ISM).
Friday the ISM said its nonmanufacturing index dropped to a reading of 48.3%, up slightly from September’s reading of 47.8%. The data missed expectations as economists were calling for a reading of around 49%.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
“Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic. October was the third consecutive month of PMI® contraction, at a slower rate compared to September,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.
The gold market has seen renewed selling pressure following stronger than expected employment data; however, initial reaction to the manufacturing data has provide some buying momentum. December gold futures last traded at $1,514.10 an ounce, relatively unchanged on the day.
Although gold prices saw a little “pop” following the disappointing manufacturing data, some market analyst note that the numbers will continue to be overshadowed by the strong employment report.