The gold market is losing ground, pushing further below $1,800 an ounce as the U.S. service sector sees stronger-than-expected activity in November, according to the from Institute for Supply Management (ISM).
Monday, the ISM said its Manufacturing Purchasing Managers Index, rose to 56.5 last month, up from November’s reading of 54.4%. According to consensus estimates, economists were looking for a drop to 53.5.
“Growth continues at a faster rate for the services sector, which has expanded for all but two of the last 154 months. The sector had an uptick in growth after pulling back in the previous two months. The rate of growth increased in November due to increases in business activity and employment,”said Anthony Nieves, chair of the ISM Services Business Survey Committee.
The gold market was seeing some technical selling pressure ahead of the report after price rose to a five-month high overnight. However, the precious metal has lost further ground in initial reaction to the latest economic data.
February gold futures last traded at $1,789.30 an ounce, down more than 1% on the day.
The components of the reported noted broad-based increased in the index as prices pressures start to recede from elevated levels. The Business Activity Index increased to 64.7%, up from October’s reading o 55.7%. at the same time, the New Orders Index rose to 56%, up from the previous reading at 56.5%.
Looking at inflation, the report said that price pressures remain high but are showing signs of easing. The Prices Paid index fell to 70%, down from October’s reading of 70.7%.