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Gold prices ignoring weak retail sales

Kitco News

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(Kitco News) - Gold prices are holding gains Friday but seeing little reaction as the holiday shopping season got off to a slow start in November.

U.S. retail sales rose only 0.2% in November following October’s revised rise of 0.4%, according to the latest data from the U.S. Commerce Department, released Friday; the data missed expectations as economists were forecasting an increase of 0.5%.

Meanwhile, core sales, which strips out vehicle sales rose 0.1% last month, following October’s rise of 0.2%. Economists were expecting to see a 0.4% rise.

The control group, which excludes autos, gas, building materials, and food services was rose 0.1%. Economists were expecting to see a 0.3% increase.

The weaker-than-expected data is not having much impact on gold prices. The yellow metal continues to hold on to modest gains; February gold futures last traded at $1,474 an ounce, up 0.12% on the day.

Adam Button, managing director at said that the disappointing data could be negative for the U.S. dollar heading into the weekend, which would in turn be positive for gold.

Although season factors could be impacting the latest consumer data, Button added that it could lead to growth downgrades for the fourth quarter.

Andrew Grantham, senior economist at CIBC, called the miss in retail sales a victim of bad luck on Friday the 13th. He also noted that season factors could be impacting the latest data.

“We would expect to see a stronger December reading, and still think that the fundamentals for consumer spending are solid, given recent job/income growth and a decent rate of household savings,” he said.

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