Kitco author Neils Christensen commented today on the developments in the price of Gold. The statements of Neils Christensen are as follows.
Gold prices are trading at session highs after the New York Federal Reserve reported that data on the region’s manufacturing sector were weaker than expected.
On Tuesday, the regional central bank announced that the overall business conditions index of the Empire State manufacturing survey dropped from a reading of 6.3 in November to 4.9 in December. The data were much weaker than expected, as the consensus estimates required an unchanged reading.
These results mark the third month in a row that the Empire State survey missed expectations.
Gold prices normally rose before economic data. However, this time it was different and in the first reactions Gold rose to the highest level of the session. Gold futures for February were traded at $ 1,858.20 per ounce, up 1.42% on the day.
Positive News for the Gold Market
Although the data was disappointing, it was noted that there was some good news in the components of the report, especially in the labor market. The report states that the labor market sees the headcount index rise to one-year high.
There was good news for the gold market, too. The report drew attention to increasing inflationary pressures.
The report said, “While input prices experienced the fastest increase in two years, sales prices increased at about the same rate as last month.”
Economists and market analysts state that they will continue to support gold prices as inflation will keep real interest rates low.