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(Kitco News) – Recession fears are helping to revive interest in gold as a safe haven as prices reverse losses after a sharp decline in the New York Federal Reserve’s regional manufacturing survey.
On Tuesday, the regional central bank said its Empire State Survey fell to -32.9 from December’s reading of -11.2. The data fell well short of expectations as economists were expecting a reading of around -8.9.
Manufacturing activity fell to its lowest level since mid-2020, when the economy shut down due to the global COVID-19 pandemic. According to the report, this was the fifth-worst reading from the survey.
“Eleven percent of respondents said conditions had improved over the month, and 44 percent said conditions had gotten worse,” the report said.
The gold market remains under some selling pressure but prices are off their lows after disappointing economic data. February gold futures were last traded at $1,915.20 an ounce, down 0.34% on the day.
The components of the report showed broad-based weakness.
The new orders index fell to -31.1 from the previous reading of -3.6. At the same time, the shipment index fell to -22.4 from 5.3 in December.
The report also showed a significant drop in momentum, with the Number of Employees Index falling to 2.8 from 14 in December.
Although inflationary pressures have eased, the report notes that producer prices remain high. The report said the Price Paid Index fell to 33 from December’s reading of 50.5.
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