Gold prices hold supporting levels after Empire State manufacturing index surges

On April 16, the New York Federal Reserve (New York Fed) said that the Empire State Manufacturing Index in April increased to 11 points, much higher than the -0.2 point level in March.

This result far exceeded analysts' forecasts, which only expected the index to increase by 0.3 points. This is also the highest level of manufacturing activity in New York state since March.

Mr. Richard Deitz - Economic Research Advisor of the New York Fed - commented: Manufacturing activity in New York state grew moderately in April.

New orders and delivery volume both increased sharply, and jobs continued to expand. However, input costs increased faster, supply was forecast to decline, and businesses were also less optimistic about future prospects.

Despite positive production data, the gold market has not reacted strongly. The nearest spot gold price was recorded at 4,812.30 USD/ounce, down 0.57% on the day.

Many experts believe that the 4,800 USD/ounce mark is currently an important technical zone. If this threshold is maintained, gold prices may consolidate their upward momentum to reach the 5,000 USD/ounce mark.

According to analysts, more optimistic economic data than expected may partly reduce safe-haven demand for gold. However, this also creates more room for the US Federal Reserve (FED) to consider reducing interest rates in the second half of the year. When interest rates fall, the opportunity cost of holding gold - non-interest assets - will also decrease, thereby supporting the price of precious metals.

Components in the report show widespread improvement. The new order index increased to 16.4 points, from 6.4 points in March. Meanwhile, the delivery index increased sharply to 20.2 points, compared to -6.9 points previously.

The labor market also recorded positive signals when the job index increased to 9.8 points, from 5.8 points last month.

However, inflationary pressure is still a worrying issue. The report shows that the input price index jumped to 51 points, much higher than the 36.6 points in March.