(Kitco News) – Mixed momentum in the U.S. manufacturing sector is helping to pressure gold prices, which has fallen clearly below $1,200 an ounce.
Thursday, the U.S. Census Bureau said that new durable goods orders increased by $11.1 billion or 4.5% to $259.6 billion, in August, up from July’s decline of 1.7% and significantly beating expectations. Consensus forecasts were calling for an increase of 1.9%.
According to reports, this is the highest increase in headline durable goods in year. The increase some as the sector copes with rising momentum in the U.S. dollar.
Meanwhile core durable goods, which strips out the volatile transportation sector was weaker-than-expected, increasing 0.1% last month. Consensus forecasts were calling for a 0.4% increase.
Gold prices were under pressure ahead of the data and have fallen further in initial reaction to that data that shows the U.S. economy continues to build momentum. December gold futures last traded at $1,192.40 an ounce, down 0.56% on the day.
Katherine Judge, senior economist at CIBC World Markets, said that while core durable goods was weaker than expected, the sector still remains healthy.
“Even with the disappointment, the three-month annualized trend rate of core capital goods held steady at a solid 11.4%, a positive indicator for business investment and GDP,” she said.
By Neils Christensen
For Kitco News