Gold prices shot to session highs after the New York Federal Reserve reported on Wednesday that its Empire State manufacturing survey improved to 15.6 in July, up from 5.7 in June and far exceeding consensus expectations of 6.2. The surge in manufacturing activity, driven by strong increases in new orders and shipments, pushed spot gold to $4,063.13 per ounce for a gain of 0.25% on the session in the moments after the 8:30 am EST release. The regional manufacturing indicator provides insight into economic conditions in the New York area, and the July reading marked a significant expansion in factory activity across multiple components including employment and order volumes.
Empire State Survey Shows Strong Manufacturing Expansion in July
The New York Federal Reserve's Empire State manufacturing survey posted a reading of 15.6 in July, rising from 5.7 in June. The result significantly exceeded consensus forecasts of 6.2, indicating manufacturing activity in the New York region expanded deeper into positive territory. The data was released at 8:30 am EST on Wednesday, coinciding with the June Producer Price Index (PPI) release.
According to the report, "New orders and shipments increased strongly. Unfilled orders increased, delivery times continued to lengthen, and supply availability continued to worsen. Employment rose at a solid clip and the average workweek edged higher. The pace of input and selling price increases remained elevated but slowed slightly."
New Orders and Shipments Reach Multi-Year Highs
The components of the Empire State survey showed broad-based improvement across the manufacturing sector. The new orders index climbed nineteen points to 22.2, while the shipments index rose sixteen points to 24.4, marking a four-year high and pointing to marked increases in both orders and shipments.
The report noted that "Unfilled orders and inventories rose slightly. The delivery times index edged up to 13.0, suggesting that delivery times continued to lengthen. The supply availability index remained negative at -10.0, pointing to worsening supply availability."
Employment and Price Indicators Show Mixed Trends
The employment picture improved in July, with the index for number of employees rising two points to 11.4, its highest reading since December 2022. The average workweek index came in at 2.8, suggesting an increase in both employment and hours worked for a sixth consecutive month.
Price indexes showed mixed results. The prices paid index declined nine points to 52.3, and the prices received index dipped four points to 27.6. According to the New York Fed, the pace of price increases remained elevated but slowed slightly after particularly sharp increases in May and June.
Firms Maintain Optimistic Outlook for Coming Months
The New York Federal Reserve reported that firms remained fairly optimistic about the outlook. The index for future business conditions came in at 27.9, with half of respondents expecting activity to increase in the months ahead.
The report stated: "New orders and shipments are expected to increase, and employment is expected to grow. Supply availability is expected to worsen somewhat, while price increases are expected to remain elevated. Capital spending plans remained modest."
FAQ
What did the New York Fed's Empire State manufacturing survey show for July?
The Empire State manufacturing survey improved to 15.6 in July, up from 5.7 in June, exceeding consensus expectations of 6.2. The new orders index climbed to 22.2, and the shipments index rose to 24.4, a four-year high. The employment index reached 11.4, its highest reading since December 2022.
How did gold prices react to the Empire State manufacturing data?
Spot gold shot to session highs immediately after the 8:30 am EST release on Wednesday, trading at $4,063.13 per ounce for a gain of 0.25% on the session. The price surge occurred in the moments following the publication of the manufacturing data.
