The latest Purchasing Managers (PMI) Index data has given gold price levels a boost after it failed to dampen fears of an incoming recession. The PMI data, released earlier this week by IHS Markit, fell short of analyst expectations and saw the PMI reading notably slump.
HIS Markit analysts said the manufacturing and service-sector data represented “the weakest upturn in U.S. private-sector output since January’s Omicron-induced slowdown.”
The manufacturing Purchasing Managers Index came out at 52.4, though expectations had been for a reading of 56.0. This marks the lowest reading in almost two years, while the service sector’s 51.6 was a five-month low.
Those figures suggest that an economic contraction, according to S&P Global Market Intelligence’s chief business economist. Chris Williamson said, “The pace of U.S. economic growth has slowed sharply in June, with deteriorating forward-looking indicators setting the scene for an economic contraction in the third quarter.
“The surveys data is consistent with the economy only expanding at an annualized rate of less than 1% in June, with the goods-producing sector already in decline and the vast service sector slowing very sharply.”
The disappointing data is good news for gold, which leaped to daily highs in the wake of its release. It gained 0.31% on the day, to trade around £1,499 ($1,844).
With this data there is another clear indicator that a big economic downturn is coming, don’t miss this opportunity to strengthen your portfolio today. Buy gold now to be in the best possible position when prices rise.
