Spot gold at $5,150/oz after ISM Services PMI improves to 56.1 in February

US ISM Services surprised to the upside, printing 56.1 in February vs 53.5 consensus (Jan revised 53.8), the strongest reading since July 2022. Despite the stronger growth signal, spot gold held firm after the 10:00am ET release and was last quoted at $5,150.38/oz (+1.21% on the day), suggesting the market is not treating the data as immediately USD/rates-bullish enough to pressure bullion. ISM noted all four major sub-indexes remained in expansion for a third straight month, and all 10 reported indexes were in expansion for the first time since March 2021. Business Activity, New Orders and New Export Orders were cited as the highest since 2024, while Backlog of Orders rose to 58.3% (best since July 2022). The Prices Index declined ~6pts over the last six months and, while still elevated (longest streak above 60% since March 2023), February marked its lowest level in 11 months. For precious metals, the setup is mixed: stronger services momentum argues for higher front-end rates and a firmer dollar (typically a headwind for gold), but the easing in the Prices sub-index tempers near-term inflation angst and could help keep real-rate pressures contained. Near-term catalysts are follow-through in US rates/FX post-ISM and any confirmation from upcoming inflation/labor prints; a renewed jump in the ISM Prices Index or a sharp repricing higher in yields would be the main immediate risk for gold longs. Notable color: respondents flagged gasoline prices rising for the first time since Feb 2025 and copper prices up for a third straight month; trade/tariff uncertainty commentary increased, but firms suggested tariff impacts are increasingly “embedded” in supply-chain costs.