On November 5, the services index came in at 54.5 for October, and although it edged slightly lower compared with the previous month, it still pointed to an economy in expansion mode.
CPT Markets noted that gold is holding near a key range, reflecting that the market is still digesting the dual signals of growth and inflation.
The number of expanding industries rose while the number of contracting industries fell, suggesting that the breadth of the services sector has not deteriorated noticeably.
CPT Markets believes this will keep the market cautious about the pace of policy, and expectations for real interest rates will also find it difficult to simply move lower.
Gold did not show a sharp immediate reaction, indicating that investors are still waiting for more indicators to align.
The purchasing managers' index is a diffusion indicator, and its persistent direction and sub-index changes are usually more important than a small one-month deviation.
Changes in services prices and orders can influence views on inflation stickiness, while gold's response to real interest rates also often comes with a lag.
If the dollar and bond markets point in different directions after the data release, gold prices may be more likely to swing back and forth within a range.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
More consecutive data still need to be verified.
Going forward, it will be worth tracking whether inflation, employment and services orders provide consistent clues.
CPT Markets mentioned that if economic data remain resilient, gold price volatility may still be amplified around interest rate expectations.
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