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(Kitco News) – The gold market is losing ground, pushing further below $1,800 an ounce as the US services sector sees stronger-than-expected activity in November, according to the Institute for Supply Management (ISM).
On Monday, the ISM said the Manufacturing Purchasing Managers Index rose to 56.5 last month, up from November’s reading of 54.4%. According to consensus estimates, economists were looking for a fall to 53.5.
“Growth continues at a faster pace for the services sector, which has expanded in all but two of the past 154 months. The sector had a rebound in growth after retreating in the previous two months. The pace of growth picked up in November due to increases in business activity and employment ,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.
The gold market saw some technical selling pressure ahead of the report after the price rose to a five-month high overnight. However, the precious metal has lost further ground in initial reaction to the latest economic data.
February gold futures last traded at $1,789.30 an ounce, down more than 1% on the day.
The components of the reported quoted broad-based increased in the index as price pressures begin to ease from elevated levels. The Business Activity Index increased to 64.7%, up from October’s reading of 55.7%. At the same time, the New Orders index rose to 56%, up from the previous reading of 56.5%.
Looking at inflation, the report said price pressures remain high but are showing signs of easing. The price index fell to 70%, down from October’s reading of 70.7%.
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