Gold Soars on Strong ISM Services PMI Reading

The Institute for Supply Management (ISM) reported that its Services Purchasing Managers Index rose to 55.4 in August, exceeding expectations and indicating economic growth.

The index was up from 54.1 in July, with readings above 50 signifying economic expansion. The farther an indicator is above or below 50, the greater or smaller the rate of change.

Spot gold prices rose as a result, increasing by 1.72% to $4,463.57 per ounce. This comes after reaching a session high of $4,496.01 around 9 am ET earlier in the day.

The Business Activity Index increased 2.6 percentage points to 61.7 percent from July's reading of 59.1 percent. The New Orders Index registered 60.9 percent, 3.7 percentage points above July's figure of 57.2 percent.

However, the Employment Index contracted for a second straight month with a reading of 47.8 percent, a 0.4-percentage point increase from the 47.4 percent recorded in July.