Gold Prices Down As Strong U.S. Retail Sales Ease Recession Fears
(Kitco News) - Recession fears are expected to ease and there is some renewed pressure on gold prices as U.S. consumers spent considerably more last month.
Thursday U.S. retail sales rose 0.7% in July following June’s revised increase of 0.3%, according to the latest data from the U.S. Commerce Department; the data was much better than as economists were expecting to see an increase of 0.3%.
Core sales, which strips out vehicle sales increased 1% last month, compared to June’s revised increase of 0.3%. The data was also beat expectations.
Meanwhile, the control group, which excludes autos, gas, building materials, and food services increased 1.0%% last month, beating the expected rise of 0.4%.
"Apparently, American shoppers are unaware of what the yield curve slope is supposedly telling them about their economic fate," said Avery Shenfeld, senior economist at CIBC.<
Gold prices saw some technical selling pressure ahead of the report and has seen further losses in initial reaction to the data. However, price are still holding critical support above $1,500 an ounce are only slightly down from its six-year high hit earlier in the week. December gold futures last traded at $1,521.50 an ounce, down 0.42% on the day.
According to some economists the resilient strength among consumers remains an important pillar of strength for the domestic economy. According to some a healthy labor market and low unemployment rate is giving households confidence to spend at levels sufficient to keep the U.S. out of recession.
Adam Button, managing director at Forexlive.com noted that in the last 7 months of 2019, US core retail sales have averaged +1.0% growth per month. “That's the strongest 7-month stretch ever,” he said.