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Gold Edges Higher As Feb. U.S. Retail Sales Fall 0.1%

Kitco News

Editor's Note: Updating earlier story with more details from report and comment from economist.

(Kitco News) - Gold futures ticked modestly higher after a Commerce Department report Wednesday showing that February U.S. retail sales decreased by 0.1% to $492 billion, when economists had been expecting a rise instead.

This was the third straight monthly decline in overall retail sales. Meanwhile, sales excluding autos and parts were up 0.2%.

Going into the report, consensus expectations compiled by news organizations had been for a rise of 0.4% in both overall sales and also sales excluding autos.

Comex April gold was $1.40 higher to $1,328.50 an ounce as of 8:32 a.m. EDT. Three minutes prior to reports on retail sales and the Producer Price Index, the metal had been at $1,326.10 an ounce.

“It's looking like a frosty opening to 2018 for U.S. retailers,” said Royce Mendes of CIBC. “Headline sales undershot expectations, falling 0.1% in February. While that came with an upward revision of two ticks to January's readings, more stripped-down measures were also underwhelming. With the headline dragged into negative territory by declines in both autos and gasoline, the core retailing number gain of only 0.1% came on the back of relatively broad-based weakness.”

Overall retail sales last month were 4% higher than in February 2017. Sales excluding autos were up 4.4% year-on-year.

Consumer purchases make up the single largest component of U.S. gross domestic product, thus market participants closely monitor the data as a gauge of the economy.

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