Gold prices are trading near strong session lows due to strong S&P PMI data helping to influence the market

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(Kitco News) – The bearish sentiment seems to be finally chasing the gold market as stronger than expected activity in the manufacturing and services sectors and technical selling pressure kept prices near session lows.

The S&P Global Composite PMI in the United States on Friday reported a healthy rise in activity within and in the service sector. The report stated that the manufacturing PMI data came in at 51.8, higher than the August reading of 51.5. The data was better than expected; According to consensus estimates, economists were looking for a reading of around 51.

The report stated that activity in the manufacturing sector reached its highest level in two months.

Meanwhile, activity in the services sector is also showing strong momentum, up to 49.2, up from August’s reading of 43.7. Economists were looking for a print around 45.5.

The report indicated that activity in the services sector reached its highest level in three months.

The gold market is unable to find any bullish momentum and prices are taking sharp losses on Friday. December gold futures were trading at $1,653 an ounce, down 1.67% on the day.

“While production declined in both manufacturing and services during September, the rate of contraction in both cases was moderate compared to August, particularly in services, with order books returning to modest growth, allaying some concerns about the depth of current slowdown. Williamson, chief commercial economist at S&P Global Market Intelligence reports in the report.

Williamson added that while production improved slightly, September is close to a quarter of economic growth since the 2008 financial crisis.

The report also indicated an improvement in inflationary pressures.

There was also better news on inflation, with supplier shortages easing to their lowest level since October 2020, helping to relieve some of the pressure from raw material prices. These improved supply chains, combined with a marked decline in demand since earlier in the year, helped cool the overall rate of cost inflation for both companies and average selling prices for goods and services to the lowest level since early 2021, Williamson said. Inflation pressures are high by historical standards, and with business activity waning, surveys continue to paint an overall picture of an economy struggling in a stagflationary environment.”

According to some market analysts, the latest economic data shows that the US economy remains resilient in the face of rising interest rates, which could force the Federal Reserve to continue raising interest rates significantly to bring down inflation.

“Is this a situation where good news is bad news? The Fed wants to see demand dip and there has been a bounce in services,” said Adam Patton, chief currency strategist at

The central bank’s aggressive monetary policy stance will continue to be a headwind for gold.

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