(Kitco News) – Gold prices are trading near session highs on Thursday morning after the Philadelphia Federal Reserve's manufacturing sector survey declined beyond expectations this month.
The regional central bank said its manufacturing business outlook for October came in at 20.9 after a reading of 37.8 in September. The data was far worse than expected, as economists were looking for a reading of 28.4 this month.
“Responses to the October Manufacturing Business Outlook Survey suggest overall expansion in the region’s manufacturing activity,” the report said. “The indicators for current activity, new orders, and shipments all moderated but remained positive this month. The firms continued to indicate overall increases in prices.”
“The survey’s broad indicators for future activity continued to suggest expectations for growth over the next six months, although those expectations were less widespread this month,” they added.
Spot gold was trading near session highs following the manufacturing data, and last traded at $4,154.16 for a gain of 1.20% on the session.
The current conditions indicators weakened this month. “The diffusion index for current general activity declined for the second consecutive month, falling from 37.8 in September to 20.9 in October,” the report said. “More than 41 percent of the firms reported increases in activity (down from 45 percent last month), and 20 percent reported decreases (up from 8 percent); 27 percent of the firms reported no change in current activity (down from 45 percent). The new orders index fell 25 points to 4.3 this month. Almost 39 percent of the firms reported increases in new orders, 34 percent reported decreases, and 22 percent reported no change. The current shipments index moved down 12 points to 15.3.”
“The employment index continued to indicate an increase in employment overall but edged down 3 points to 9.1 in October,” they noted. “Eighteen percent of the firms reported increases, 9 percent reported decreases, and 68 percent reported no change in employment. The average workweek index declined 11 points to 7.5, its lowest reading since June.”
The Philly Fed report also showed overall increases in prices.
“The prices paid index moved down 5 points to 43.2 in October,” the report said. “More than 43 percent of the firms reported increases in input prices, 52 percent reported no change, and no firms reported decreases. The current prices received index rose 9 points to 40.1, its highest reading since May 2025. More than 41 percent of the firms reported increases in the prices of their own goods (up from 33 percent last month), 52 percent reported no change (down from 66 percent), and 1 percent of the firms reported decreases (unchanged from last month).”
Looking ahead, firms continue to expect growth, but their expectations moderated in October.
“The diffusion index for future general activity fell 20 points to 33.0 this month, its second consecutive decline and lowest reading since January,” they said. “More than 51 percent of the firms expect an increase in activity over the next six months, 18 percent expect a decrease, and 18 percent expect no change. The future new orders index fell 25 points to 37.0, and the future shipments index fell 26 points to 35.2. The firms continue to expect increases in employment over the next six months, although the future employment index more than offset its increase from last month, falling 21 points to 30.1.”
“Both future price indexes also decreased this month but remained well above their respective long-run averages,” they added. “The future prices paid index fell 8 points to 62.9, while the future prices received index fell 10 points to 62.1. The index for future capital expenditures edged down 2 points to 34.9 this month.”
