Wednesday, May 4, 2011

ISM Service Index Plunges, But Gold Doesn't React

The Institute for Supply Management has released its Services Index number for April. It still shows expansion in the sector, as April's number was above 50, but the reading plunged to 52.8% from March 57.3%. Expectations were for a mild uptick, not a tumble.


This number disappointed equity investors, but gold did not benefit from it except for a blip. The metal was at $1,538 when the number was released, and it jumped up to $1,541 right afterwards. But, it didn't continue rising despite the U.S. Dollar Index slumping down to a new thirty-one-month low of 72.685 shortly after the news. Instead, the metal skidded and then tumbled as the greenback recovered a little. As of just after 11:00, gold was at $1,526.

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