Today the U.S. Manufacturing ISM report was published and the U.S. Manufacturing PMI reached 50.8% during October. The U.S. Manufacturing PMI, which is an index that shows the economic activity in the U.S. manufacturing sector, grew for the 27th consecutive month; the growth rate declined from 51.6% in September to 50.8% in October i.e. a 0.8 percent points decrease. This means that the U.S. manufacturing sector is still growing but at a slightly slower pace in October compared to September.
Among the factors that were examined in this survey: one of the sharpest decrease was in customers’ inventories from 49.0% to 43.5% – a decrease of 5.5 percent point; exports also fell by 3.5 percent points to 50% – still in a growing rate; on the other hand, among the factors that expanded were new orders – a rise of 2.8 percent point to 52.4% and backlog of orders – an increase of 6.0 percent point to 47.5.
According to Roache et. al (2008) it was suggested that the PMI Manufacturing ISM report has a negative correlation with gold and silver prices, without controlling the US dollar effect. Currently, it seems that this news doesn’t have much of an effect on gold and silver prices as they are traded sharply down along with the rest of the stocks and commodities markets due to the concerns in the financial community over the European debt crisis. The PMI news also suppose to have a positive lagged effect on natural gas prices, i.e. all things being equal and when controlling for the U.S dollar, as the PMI Manufacturing ISM index falls so do natural gas prices. Currently natural gas prices are plummeting along with other energy commodities prices such as crude oil prices.
The U.S. stock market indexes are currently freefalling including the DOW, S&P500 and NASDAQ.
Current gold price, short term futures (December 2011 delivery) is traded at $ 1,705 per t oz. a $20 decrease or 1.16%, as of 17:42*.
Current Nymex crude oil price, short term futures (December 2011 delivery) is traded down by 2.80%, at $90.58 per barrel as of 17:46*.
Euros to USD is currently traded down at 1.3687 a 1.23% decrease as of 17:57*.
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