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Gold price under pressure but largely ignores improvement in New York Fed’s Empire State Survey

The gold market is starting the week on the back foot but is not seeing much reaction to better-than-expected improvement in the New York Region’s manufacturing sector, according to the latest data from the New York Federal Reserve.

On Monday, the regional central bank said its Empire State Manufacturing Survey rose to -6, up from May’s reading of -15.6. Although activity remains in contraction territory, the survey was better than expected, as economists were looking for a reading of around -12.5.

“Manufacturing conditions remained weak in New York State in June. Employment continued contracting, and capital spending plans remained flat. Despite lackluster conditions, optimism about the six-month outlook rose to its highest level in over two years.” said Richard Deitz, Economic Research Advisor at the New York Fed in the report.

The latest economic data is not significantly impacting gold’s price action. August gold futures last traded at $2,333.30 an opulence, down 0.67% on the day.

Analysts have said that gold needs to see a solid push above $2,350 an ounce before the market’s neutral sentiment starts to shift.

Although activity remains weak, the report noted broad-based improvement. The New Orders Index rose to -1.0, up sharply from May’s reading at -16.5; meanwhile, the Shipments Index rose to 3.3 up from -1.2.

However, the labor market continues to lose momentum. The report said the Number of Employees Index dropped to -8.7, down from May’s reading of -6.4.

The report also noted that the slower economic activity is also helping cool down inflation. The report said that the Prices Index dropped to 24.5, down from the prior reading of 28.3.

Source: Neils Christensen Kitco