Gold price sees little movement following mixed flash PMI data

New York (Dec 16)  The gold market is holding on to steady gains but continues to see little reaction to mixed economic data.

Wednesday, IHS Markit said its preliminary PMI data for December showed mixed sentiment with steady optimism in U.S. manufacturing sector but dropping in service sector. 

The research firm said U.S. manufacturing Purchasing Managers Index for December dropped to a reading of 56.5, down from November’s reading of 56.7. However, the estimates slightly missed consensus forecasts; economists were calling for a reading around 55.9.

Meanwhile the firm’s service-sector PMI reading fell to a reading of 55.3, down from November’s reading of 58.4. The data was weaker than expected with consensus forecasts calling for a reading around 55.7.

The gold market is not seeing much movement following the preliminary data. February gold futures last traded at $1,851.10 up 0.15% on the day.

Chris Williamson, chief business economist at IHS Markit, said that the data shows that although activity is slowing it continues to expand at a solid pace.

“The survey data add to the likelihood of the economy having continued to expand in the fourth quarter, building on the recovery seen in the third quarter,” he said. “However, while November had seen business buoyed by increased activity around Thanksgiving as well as a surge in business confidence following the Presidential election and encouraging vaccine news, December has seen companies rein in their expectations, given the higher virus case numbers and tougher lockdown stances adopted in some states. Lockdowns in other countries were meanwhile reported to have hit exports.”

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