Gold Stalls as US Business Activity Hits Five-Year Highs

The US economy continues to expand at an annualized rate of 5%, fueled by surging domestic demand and export growth. According to S&P Global, the flash Composite Purchasing Managers Index reached 57.6 in October, maintaining levels of activity unseen since early 2015. Manufacturing outperformed expectations with a reading of 56.0, while the services sector held steady at 57.9.

Spot gold last traded at $4,010.27, reflecting a 0.33% decline as markets digest the positive economic outlook. Analysts suggest that the combination of healthy corporate earnings and hiring growth provides the Federal Reserve with significant leeway to maintain a hawkish stance on interest rates. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that while the output remains strong, persistent supply chain bottlenecks and rising energy costs are driving the sharpest increase in selling prices in over four years. These inflationary tailwinds suggest consumer prices may continue to climb well above the Fed's target in the coming months.