Gold Prices gained on bargain hunting $3.50 an ounce at $1,155.00 to slip after the U.S. Institute for Supply Management published that its headline December manufacturing index climbed to 54.7 percent from 52.3 percent in November.
The number is slightly higher from different forecasts that predicted the index would be around 53.5 percent to 53.8 percent. Any number above 50 percent is a sign of expansion in manufacturing activity.
Royce Mendes, of CIBC Capital Markets, pointed out that the monthly gain in the headline index was the fourth in a row and takes it to the highest level since the end of 2014.
The index is compiled from a survey of executives who order raw materials and other supplies for their companies. The gauge tends to rise or fall in conjunction with how healthy is the economy.
Both new orders and employment sub-indices were higher in December.
The index for new orders surged 60.2 percent from 53.0 percent while production index surged to 60.3 percent from 56.0 percent, both are near two-year highs. The employment index edged slightly to 53.1 percent from 52.3 percent, its highest level since mid-2015.
11 manufacturing Industries surveyed reported growth in December out of 18; the one that posted its highest surge was inflation. Prices index advanced to 65.5 percent from 54.5 percent.
Still, other measures of U.S. inflation show that prices remain low despite a small increase in the past several months.
The one downside in the report was the 5-year high level raw materials’ prices paid by companies.
The Eleven reported growth in December were petroleum and coal products; primary metals; miscellaneous manufacturing; food, beverage and tobacco products; apparel, leather and allied products; paper products; machinery; electrical equipment, appliances and components; computer and electronic products; fabricated metal products and chemical products.