Thursday’s Institute for Supply Management (ISM) data on the US service sector showed sentiment had fallen much more than expected between August and September, stoking the market’s fears of an imminent recession. September’s 52.6% is the lowest level recorded since 2016 and quite a bit lower than the 55.1% that had been expected.
This fall means the industry is just 2.6% away from contraction (over 50% is seen as a sign of market growth but the smaller the figure above that, the smaller the rate of growth). Data from the previous month was 56.4%, suggesting a rapid rate of decline and again giving market’s cause for recession concern.
As a result of these worries, gold prices climbed higher through the day on Thursday. Of course, the next set of data in four weeks time will be very telling. If there is a further drop, a recession could be imminent – should that figure fall, you can expect gold prices to leap giving all the more reason to buy now.
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