Gold future contracts edged higher during Wednesday’s Asian trade session. Overnight, during the U.S. trade session, the price of the spot contract rose as much as one percent. Traders were worried about global economic growth as manufacturing activity continues to slow.
A bleak U.S. manufacturing, from the ISM, elevated fears that the global economy continues to slow. This is increasing odds of more rate cuts down the road.
As of 1:20 am, the spot gold futures contract fell 0.1 percent to trade at $1,479.43 per ounce. This contract was trading near a two month low, on Tuesday, at $1,458.50 per ounce and rose one percent on Wednesday.
U.S. gold futures, for front month delivery, fell lower. This contract lost 0.2 percent to trade at $1,485.4 an ounce.
Overnight, data showed that U.S. manufacturing activity crumbled to a better than a ten year low for the month of September. Trade tensions weakened exports and heightened fears that the United States economy will slow down for the third quarter.
After the data was released, President Donald Trump, once again, attacked the Federal Reserve. He said that that Fed is keeping interest rates “too high: and that a strong dollar is hurting factories.
There was also weak purchasing manufactures’ indices out of Europe that worrier traders sending capital into safe haven asset classes.
Gold Traders Digest the Bleak ISM Manufacturing Report
Yesterday’s dismal Institute for Supply Management (ISM) release of their monthly manufacturing report for the United States boosted the safe haven asset classes over riskier assets. Simply put, the ISM manufacturing activity survey missed expectations.
For September, manufacturing in the world’s largest economy contracted once again as economic activity continues to slow down thanks to the trade war with China. The ISM report, the month of September, printed at 47.8. A reading below 50 is contraction. This was the ISM’s lowest reading since 2009.