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(Kitco News) Gold fell after recently released data showed that orders for long-lived US factory goods increased 0.2% in December against the expected 0.9% advance.
Meanwhile, November data has been revised upward to a 1.2% increase.
After the launch, gold prices fell with April’s Comex gold futures trading at $ 1,843.70, down 0.60% on the day.
The monthly increase in orders for durable goods was $ 0.4 billion and was largely driven by items related to machinery.
The durable goods core, which excludes the volatile transport sector, increased 0.7% in December, exceeding expectations. Excluding defense, new orders advanced 0.5%.
The government’s durable goods report covers items with an expected life of at least three years, such as appliances, computers, furniture, automobiles and airplanes.
While spending on durable goods represents a small part of American economic output, economists carefully watch for any changes as a sign of where the economy may be heading.
Looking at the December report, analysts said the details were more encouraging than the headline numbers.
“The weakness was concentrated in the volatile transport component, which showed a 1.0% drop in orders,” said CIBC Capital Markets senior economist Katherine Judge. “The most important core of the group of capital goods (non-defense, ex-aircraft), an indicator of business investment in equipment, registered growth of 17.5% in shipments in annualized terms in the fourth quarter, suggesting that business investment will be a contributor to tomorrow’s fourth quarter GDP growth report. The advance in orders in this group, which increased by 20% annualized in the fourth quarter, is a positive indicator for capital expenditures in early 2021, as the goods production sectors are expected to remain resilient in the middle of the second wave.
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