DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold held its earlier gains Friday after fresh United States economic data showed business activity accelerating more sharply than economists expected. Strength in the dominant services sector outweighed a modest loss of momentum among manufacturers.

S&P Global said its flash Composite Purchasing Managers Index climbed to 56.0 in August from 54.5 in July. Economists had expected the composite reading to fall to 53.2, making the improvement a notable upside surprise.

“US business activity growth accelerated sharply for a second successive month in August to reach the fastest since April 2022,” the report noted. “A surge in service sector business activity helped offset a marked slowing of growth in the manufacturing sector, the latter blamed in part on reduced inventory building and supply delays.”

“Supply times lengthened sharply again, and to one of the greatest extents seen over the past four years, contributing to a further buildup of uncompleted orders across both manufacturing and services.”

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“Jobs were added at the fastest rate since the start of last year as increasingly confident companies took on more staff to meet higher demand,” the report added.

“Business growth expectations struck a nine month high. Price pressures meanwhile moderated, especially in terms of selling price inflation, though input cost inflation remained elevated thanks principally to high energy prices.”

Services delivered the strongest portion of the report, with the sector PMI rising to 56.8 in August from 54.6 in July. That result easily surpassed the consensus estimate of 54.0 and confirmed that service providers are carrying more of the economic expansion.

Manufacturing moved in the opposite direction, although it remained in expansion territory above 50. The manufacturing PMI slipped to 53.2 from 53.9, missing economists’ forecast for an unchanged reading of 53.9.

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Gold recovered from its session lows following the North American open and the release of the PMI figures. Spot gold was last trading at $4,585.15 per ounce, up 1.46% on the day, suggesting that stronger growth data did not shake investor demand for bullion.

“US business is booming, with firms reporting the fastest output growth for over four years so far in the third quarter as the expansion picked up further momentum in August,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. “The survey data for the third quarter are currently pointing to annualized growth approaching 3.0%, up solidly from the 1.5% pace seen in the second quarter.”

“Jobs growth has also shown a welcome revival in August, with employers gaining in confidence as concerns fade over the negative economic impacts of tariffs and the conflict in the Middle East,” he added.

“However, the latter in particular remains a key area of concern for businesses, especially via the impact on supply lines and energy prices. Supply delays were again reported in August to one of the greatest extents seen over the past four years, clearly constraining output in many companies.”

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“Price pressures, while fading, also remain elevated and prone to renewed upward pressures should energy prices rise again.”

Williamson said the engine of growth has shifted decisively from manufacturing toward services between the second and third quarters. That transition leaves the economy increasingly dependent on household demand and activity in financial services.

“As reduced safety stock building and supply delays dampen factory production growth, the service sector is now playing a key role in driving a sustained US expansion, underscoring a dependency on consumer spending and financial services growth.”

The report presents a mixed backdrop for precious metals investors. Faster economic growth and stronger hiring can reduce expectations for easier monetary policy, but persistent input costs, energy risks, and supply disruptions continue to preserve gold’s appeal as a store of value.

For now, bullion is proving resilient despite data that would ordinarily support the dollar and higher interest rate expectations. Gold’s ability to remain above $4,585 shows that investors are still paying close attention to inflation exposure, geopolitical uncertainty, and vulnerabilities hidden beneath strong headline growth.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.