(Kitco News) – The gold market is losing ground, pushing further below $1,800 an ounce as the U.S. services sector sees stronger-than-expected activity in November, according to the Institute for Supply Management (ISM).
On Monday, the ISM said its Manufacturing PMI rose to 56.5 last month, from 54.4% in November. 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 for all but two of the past 154 months. The sector saw a pick-up in growth after declining in the previous two months. The pace of growth picked up in November due to increases in business activity and employment,” said Anthony Nieves, chairman of the ISM Services Business Research Committee.
The gold market came under 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 the 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.
Components of the reported broad base ticked higher in the index as price pressures begin to recede from elevated levels. The Business Activity Index rose to 64.7%, up from 55.7% in October. At the same time, the New Orders Index rose to 56%, from the previous reading of 56.5%.
Looking at inflation, the report said price pressures remain high but are showing signs of easing. The Prices Paid index fell to 70%, from 70.7% in October.
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