Gold Prices Holding Steady Near $1,300 As U.S. Retail Sales Disappoint
(Kitco News) - The gold market is holding near the important psychological $1,300 level as fewer consumers opened their wallets last month.
Wednesday, U.S. retail sales fell 0.2% in April following March’s rise of 1.6%, according to the latest data from the U.S. Commerce Department. Economists were expecting to see an increase of 0.2%.
Core sales, which strips out vehicle sales increased 0.1% last month, compared to March’s increase of 1.2%. Economists were expecting to see a 0.7% increase.
Growing global economic uncertainty has helped push gold prices back to the $1,300 an ounce level and analysts have noted that weak U.S. economic data should continue to support the yellow metal as investor worries about a looming recession grow. June gold futures last traded at $1,299.60 an ounce, up 0.26% on the day.
Greg Michalowski, currency analyst at Forexlive.com said that the retail sales numbers shows that the U.S. economy was not off to a good start in the second quarter.
“All the measures for the month were worth than expectations,” he said. “The US consumer makes up some 70% of GDP.”
Avery Shenfeld, senior economist with CIBC Capital Markets, said that the disappointing retail sales data is expected to be negative for the U.S. dollar and push U.S. bond yields lower, two factors that will support gold prices.
“US retailers better hope that April showers bring May flowers, because April on its own was a disappointment after a solid pick-up in March,” he said. “The "control group" that feeds most directly into consumption was only flat, after a 1.1% gain in March, and overall is still running a bit lower than where the trend line prior to an ugly December would have had it”