Gold Holds Steady After Weak U.S. Manufacturing Data

Weak manufacturing data helped to keep gold prices steady in Monday’s trading session following last week’s Thanksgiving holiday. As U.S. equities were reaching highs in major indexes like the S&P 500 and Nasdaq Composite, gold prices were feeling downward pressure from a renewed risk-on investor sentiment.

ISM Manufacturing data released on Monday showed that manufacturing activity lagged in the month of November following a decline in inventories and new orders. The ISM Manufacturing Index came in at 48.1 compared to forecasts of 49.4—October’s reading was 48.3.

Per a CNBC report, following Monday’s session, gold was “little changed at $1,464.20 per ounce. U.S. gold futures settled down 0.3% at $1469.2.”

“Market started the day on a risk-on tone, but got caught off guard when the ISM data was a bit weaker-than-expected. We saw equities, yields and the dollar all correct, which has helped gold a bit,” said Ryan McKay, a commodity strategist at TD Securities.

The Federal Reserve has been keen on relying on economic data to decide the direction of its interest rate policy. More cuts could help the case for higher gold prices, but in its last meeting, the central bank said it doesn’t foresee further rate cuts coming.

“The notion is that the U.S. Federal Reserve is done cutting (interest rates) for now and we’ll need to see a trend in weaker data through early 2020 to convince the market that we’re going to get more cuts. Until then, there’s no real impetus to see gold rally,” McKay added.

Investors looking to get gold exposure can look at the SPDR Gold MiniShares (NYSEArca: GLDM)as well as the SPDR Gold Shares (NYSEArca: GLD).

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