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The gold market erased its early-morning gains after the newly released data showed that orders for long-lasting U.S. factory goods were up 1.7% in May versus the expected decrease of 1%.
The monthly increase in durable goods orders was $4.9 billion and was largely driven by transportation equipment that was up for the third consecutive month, the U.S. Census Bureau said in the report.
The core durable goods section, which excludes the volatile transportation sector, was up 0.6% in May versus the expected drop of 0.1%. Excluding defense, new orders rose 3%.
The government’s durables report covers items with an expected life of at least three years, such as kitchen appliances, computers, furniture, autos, and airplanes. Economists carefully watch the data for signs of where the economy might be heading.
Despite the stronger-than-expected report, analysts still see weakness in investment to come.
“The wider evidence still suggests that business equipment investment has further to fall,” said Capital Economics deputy chief U.S. economist Andrew Hunter. “While the drag from higher rates on residential investment appears to be fading, we still think the hit to business investment has further to run.”
Following the release, gold declined, with upbeat economic data confirming the Federal Reserve's potential 25-basis-point rate increase in July. August Comex gold futures last traded at $1,933.70, down 0.01% on the day.
By
Anna Golubova
For Kitco News
