The ISM Services Purchasing Managers Index reached 54.1 in July, falling short of the 54.5 consensus forecast. While the figure remains marginally above the 12-month average of 53.4, the stagnation in growth has triggered investor anxiety regarding a broader economic deceleration.
Gold rallies to six-week high as service sector growth cools
Gold prices climbed to $4,225.80 an ounce on Wednesday, marking a 3.65% daily gain and the precious metal’s strongest position in six weeks. The surge follows fresh data from the Institute for Supply Management showing the U.S. service sector expanded at a slower pace than market analysts had anticipated.
Market participants are betting that this cooling performance may compel the Federal Reserve to shift away from its aggressive monetary tightening stance. With thirteen industries reporting growth and four experiencing contraction, the underlying data highlights a fragile expansion. This sentiment has provided a clear catalyst for gold, which continues to trade near session highs as traders price in the potential for a less hawkish central bank outlook.
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