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Gold Prices Extend Loss As U.S. April Retail Sales Rise 0.3%

Kitco News

(Kitco News) - Gold futures extended overnight losses after a Commerce Department report Tuesday showing U.S. April retail sales rose by 0.3% to $497.6 billion.

Meanwhile, sales excluding autos were also up 0.3%.

Going into the report, consensus expectations compiled by news organizations had been for a rise 0.3% in overall sales. Sales excluding autos were forecast to be up 0.5% or 0.6%.

As of 8:42 a.m. EDT, Comex June gold was down $15.60 to $1,302.60 an ounce. Five minutes before reports on retail sales and the Empire State manufacturing survey, the metal was at $1,305.90.

Gold came into the New York trading day on the defensive, with overseas analysts blaming the losses on the stronger U.S. dollar amid recently rising Treasury yields.

March retail sales were revised upward to a gain of 0.8% from the previously reported rise of 0.6%.

“U.S. retail sales made a solid but unspectacular start to Q2,” says Andrew Grantham of CBIC Economics. “The 0.3% gain in headline sales was in line with consensus expectations, although a two-tick upward revision to the prior month (now +0.8%) added a somewhat positive tone.”

Grantham commented that colder-than-normal weather in parts of the U.S. did not appear to materially dampen sales, as clothing (up 1.4%) and building materials (up 0.4%) sales were both higher.

“Overall, these are solid figures, particularly given the upward revision to March, which supports our forecast that consumer spending is accelerating again in Q2 after a sluggish first quarter,” Grantham said.
April retail sales were up 4.7% year-on-year, while sales excluding autos were up 4.8% from the same month of 2017.

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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