Yesterday, the U.S. Manufacturing ISM report was published; according to the recent update, the U.S. Manufacturing PMI index edged down to 49.6% during August 2012. The U.S. Manufacturing PMI is an index that estimates the economic progress of the U.S. manufacturing sector; this means the manufacturing sector contracted for the third consecutive month after it had expanded for 36th consecutive months since July 2009; the index declined from 49.8% in July to 49.6% in August i.e. a 0.2 percent point drop. This means that the U.S. manufacturing sector is contracting in August at a slightly faster pace than in July.
Among the factors that were examined in this survey: one of the sharpest contractions was in production: from 51.3% to 47.2% – a decrease of 4.1 percent point; prices also hiked by 14.5% to 54. Inventories on the other hand rose by 4 percent points to 53; among the sectors that contracted at a faster pace were new orders and customer inventories.
According to Roache et. al (2008) it was assessed that the PMI Manufacturing ISM report tends to be negatively correlated with the changes of gold and silver prices without controlling to the U.S dollar effect. Furthermore, the PMI news suppose to have a positive lagged effect on natural gas prices, i.e. all things being equal including the U.S dollar, as the PMI Manufacturing ISM index tends to fall, natural gas prices also decrease. Since the PMI didn’t change much, this news might have little effect on these commodities prices.
Current gold price, (October 2012 delivery) is traded at $ 1,692.4 per t oz. a $3.6 decrease or 0.21%, as of 11:09*.
Current Nymex crude oil price, (October 2012 delivery) is traded down by 0.19%, at $95.12 per barrel as of 11:09*.
Euros to USD is currently traded at 1.2551 as of 11:09*.
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