Gold prices fell to session lows on Thursday morning after the Philadelphia Federal Reserve's manufacturing business outlook survey for July rose to 41.4, far exceeding the expected reading of 13.0 and June's 10.3. The better-than-expected data triggered a selloff, with spot gold trading at $4,003.16 per ounce for a loss of 1.43% following the 8:30 am ET release. The regional central bank reported overall expansion in manufacturing activity, with indicators for current activity, new orders, and shipments all rising this month alongside continued employment increases and elevated price indexes.
Philly Fed Reports Highest Current Activity Reading Since November 2021
The diffusion index for current general activity jumped 31 points to 41.4 in July, marking its highest reading since November 2021. More than 53 percent of firms reported increases in activity, up from 32 percent in June, far exceeding the 12 percent reporting decreases (down from 22 percent). The remaining 24 percent of firms reported no change in current activity, down from 45 percent in the prior month.
The index for current new orders increased 10 points to 37.0, also reaching its highest level since November 2021. The current shipments index rose 19 points to 33.7, its highest reading since April. Almost 45 percent of firms reported increases in shipments, 11 percent reported decreases, and 44 percent reported no change.
Employment Index Reaches December High at 10.0
The employment index edged up 2 points to 10.0 in July, its highest reading since December. The share of firms reporting employment increases (13 percent) exceeded the share reporting decreases (3 percent), while most firms (83 percent) reported no change in employment levels this month.
The average workweek index rose 21 points to 14.0, its highest reading since January 2025.
Price Pressures Continue with Prices Paid Index at 53.9
The prices paid index ticked up to 53.9 this month. More than 54 percent of firms reported increases in input prices, while no firm reported decreases and 46 percent reported no change.
The current prices received index rose 7 points to 27.4. Almost 27 percent of firms reported increases in the prices of their own goods, none reported decreases, and 73 percent reported no change.
Future Activity Index Falls to 34.4 Amid Continued Growth Expectations
The diffusion index for future general activity fell 16 points this month to 34.4. Almost 52 percent of firms expect an increase in activity over the next six months, exceeding the 17 percent that expect a decrease, while 22 percent expect no change.
The future new orders index fell 26 points to 35.1, and the future shipments index decreased 21 points to 39.3. The future employment index inched down 1 point to 29.5.
Both future price indexes declined but remained above their long-run averages. The future prices paid index moved down from 63.2 to 56.7, and the future prices received index dropped 26 points to 41.4. The index for future capital expenditures remained elevated but fell 11 points to 30.1.
FAQ
What caused gold prices to fall on Thursday morning?
Gold prices fell after the Philadelphia Federal Reserve's manufacturing business outlook survey for July came in at 41.4, far exceeding the expected reading of 13.0 and June's 10.3. Spot gold traded at $4,003.16 per ounce for a loss of 1.43% following the 8:30 am ET release.
What did the Philly Fed report show about current manufacturing activity?
The diffusion index for current general activity jumped 31 points to 41.4 in July, its highest reading since November 2021. More than 53 percent of firms reported increases in activity, the index for current new orders increased 10 points to 37.0, and the current shipments index rose 19 points to 33.7.
