Service sector

Gold price remains below $1,800 following strong activity in the services sector ISM PMI

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(Kitco News) – The price of gold fell below $1,800 an ounce as momentum in the services sector was slightly stronger than expected in January, according to the latest data from the Institute for Supply Management. (ISM).

On Thursday, the ISM said its services sector index posted a reading of 59.9% last month, down slightly from December’s reading of 62.0%. Momentum in the services sector was better than expected, with consensus forecasts calling for a decline to 59.5%.

“The composite index showed growth for the 20th consecutive month after a two-month contraction in April and May 2020. Although there was a pullback for most sub-indices in January, the growth rate remains high for the service industry,” Anthony said. Nieves, chairman of the ISM Services Business Survey committee.

The gold market is not seeing much reaction to the latest economic data as prices remain below $1,800 an ounce. April gold futures last traded at $1,790.40 an ounce, down more than 1% on the day. Gold has been trapped around $1,800 for the past few days, recovering from last week’s strong selloff.

Looking at some of the components of the report, the business activity index fell to 59.9% from December’s reading of 68.3%. Meanwhile, the new orders index fell to 61.7%, down from the previous reading at 62.1%.

The employment index fell to 52.3% in January, from 54.7% in December.

The ISM also continues to show relatively high inflationary pressures. The price index fell to 82.3%, down from December’s figure of 83.9%.
Persistently high inflation remains a concern for future growth, the ISM said.

“Respondents continue to be impacted by supply chain issues related to the coronavirus pandemic, including capacity constraints, demand-driven inflation, logistical challenges and labor shortages. noted.

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