The price of gold fell from a new six-month high, as the main manufacturing index of the Institute for Supply Management fell short of expectations in December, declining slightly more than expected.
The ISM manufacturing index stood at 48.4% last month against the consensus forecast of 48.5%. The monthly figure also increased, by 0.9 percentage points, compared with the November value of 49%.
According to the report, the manufacturing PMI is the lowest since May 2020, when it stood at 43.5%.
Values of such diffusion indices above 50% are considered as a sign of economic growth, and vice versa. The farther the score is from 50%, above or below, the faster or slower the rate of change.
The employment index rose to 51.4% in December, up 3% from the previous month. The new orders index fell to 45.2% from 47.2%, while the production index fell to 48.5% from 51.5%.
The two manufacturing industries that showed growth in December were commodity metals and petroleum and coal products. The reduction occurred in thirteen industries, including wood products, fabricated metal products, chemical products, paper products, plastic and rubber products, electrical equipment, appliances and components, and furniture and related products.
Analysts note that the monthly drop was largely due to the fall in the production index. "Employers continued to be cautious in managing headcounts at the end of last year in the face of uncertain economic conditions in 2023," said Karyne Charbonneau, chief executive of CIBC Capital Markets.
After the release, gold prices began to fall.
