The United States has released the latest data on the purchasing managers’ index (PMI) for services as reported by ISM, which has influenced the pricing of Gold.
For March, the services PMI was reported at 50.8, significantly lower than the forecast from Trading Central which was 53, and down from the previous month’s 53.5.
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Following this announcement, the price of Gold rebounded and climbed back above US$3,100 per troy ounce after having previously dropped to US$3,054 per troy ounce.
This morning, Gold prices surged and hit an all-time high of US$3,067 per troy ounce before reversing direction due to profit taking.
The sharp increase in Gold prices is a response to the recent hike in import tariffs and the reciprocal trade policies of US President Donald Trump. Such policies could trigger a larger trade war and may lead to a slowdown in the global economy, thereby increasing Gold’s appeal as a safe haven. However, the significant rise since the start of the year prompted profit taking, causing prices to fall back to US$3,054 per troy ounce.
The release of the PMI data showing a considerable decline highlights the slowdown occurring in the US economy. The PMI uses a benchmark of 50 to demarcate between expansion and contraction.
Readings above 50 indicate expansion, but given today’s release is close to this pivotal figure, it suggests that the signs of an economic slowdown in the US are becoming more pronounced. This has added further positive sentiment for Gold.
