US manufacturing strength halts gold rally near $3,955
Gold rose about 2% to $3,955.60/oz, but strong US manufacturing data at 55.5 capped gains and kept the Fed focused on inflation.
Spot gold rose about 2% to $3,955.60 per ounce, but the gains ran into stronger-than-expected US industrial activity data, according to Kitco News.
The Institute for Supply Management's manufacturing index rose to 55.5 in October from 54.5, beating expectations, with new orders at 55.3, production at 59.0 and the prices index at 75.2.
Analysts said solid economic activity gives the Federal Reserve room to stay focused on its commitment to bringing inflation down to its 2% target.
Gold prices stayed near session highs, but the strength of the data limited further gains as investors await more signals on the path of monetary policy.
What do these terms mean?
Institute for Supply Management index: A monthly index measuring US factory activity, with a reading above 50 signalling expansion.
Prices index: A component of the manufacturing survey that tracks changes in input prices and is watched as an early indicator of inflation pressure.
Inflation target: The level a central bank typically aims for, usually 2% a year, to keep prices stable.
Monetary policy: Central bank decisions on interest rates and money supply to influence inflation and economic activity.
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