Gold fell below the 2350 mark! The growth rate of business activity in the US reached its fastest level in more than two years

Golden10 Data ·  May 23 22:21

The US PMI data for May exceeded expectations, gold fell to the 2,350 mark, and expectations of the Fed's interest rate cut are once again cold!

At 9:45 Beijing time on Thursday, the US released the preliminary S&P global PMI data for May. According to the data, US business activity is accelerating at its fastest pace in two years, which mainly reflects strong growth in service providers and a recovery in inflation.

The initial value of the US S&P global manufacturing PMI recorded 50.9 in May, above expectations and the previous value of 50, a new high in 2 months; the initial value of the US S&P global services PMI recorded 54.8 in May, higher than the forecast and previous value of 51.3, a new high in 12 months; and the initial value of the US S&P global composite PMI recorded 54.4 in May, a new high in 25 months.

The initial value of the US S&P global manufacturing PMI in May rose to 50.9 from 50.0 in April, indicating a moderate improvement in the overall business conditions of the commodity production sector. Although lower than February and March data, the latest PMI is the third highest in the past 20 months. Compared with April, both output and employment contributed more and more positively to PMI, while the drag on PMI from new orders and purchased inventory decreased. The average delivery time of suppliers accelerated slightly this month, indicating that suppliers are less busy and therefore have less impact on PMI.

After the data was released, the US dollar index continued to rise, with a short-term increase of nearly 30 points, and spot gold fell below the 2,350 mark in the short term. Traders postponed the estimate of when the Federal Reserve will cut interest rates for the first time from November to December.

COMEX's most active gold futures contract instantly traded 2,855 lots within one minute from 11:50 to 11:51 Beijing time on May 23, with a total contract value of US$672 million.

COMEX's most active silver futures contract instantly traded 617 lots within one minute at 9:53 -- 9:54 Beijing time on May 23, with a total trading contract value of US$95 million

Chris Williamson, chief business economist at S&P Global Market Intelligence, said that after two months of slow growth, the US economic recovery accelerated again. Preliminary PMI data showed that May saw the fastest expansion in more than two years. These data suggest that the US economy will once again achieve strong GDP growth in the second quarter. Not only did output rise as orders resumed growth, but business confidence also increased, which indicates brighter prospects for the year ahead. However, due to uncertainty about future inflation and interest rate trends, companies remain cautious about the economic outlook and continue to express concerns about geopolitical instability and the presidential election.

Williamson added that the May PMI data showed an increase in sales price inflation and continued to show that inflation was slightly above target. Interestingly, the main driver of inflation now comes from manufacturing rather than services, which means that the inflation rate of both costs and sales prices is now higher than the standard of the pandemic, which indicates that the Federal Reserve's 2% target still seems difficult to achieve.

The translation is provided by third-party software.

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