Gold price pushes to session highs following 16.4% drop in April retail sales
(Kitco News) - Gold prices are at session highs holding near a one-month high and is reacting slowly to extremely disappointing economic data as U.S. consumers forced to stay at home last month significantly cut back on shopping.
U.S. retail sales fell 16.4% in April following March’s revised decline of 8.3%, according to the latest data from the U.S. Commerce Department, released Friday; the data missed expectations as economists were forecasting an drop of 12%.
According to reports, this is the biggest drop in retail sales since the data has been collected. Last month was the previous record.
"The modern retail sales data series dates back to 1992 and this is double the worst fall on record," said Adam Button, senior currency strategist at Forexlive.com
Meanwhile, core sales, which strips out vehicle sales fell 17.2% last month, following March’s decline of 4.5%. Economists were expecting to see an 8.6% drop.
The control group, which excludes autos, gas, building materials, and food services dropp3ed 15.%. Economists were expecting to see a 5% decline.Gold prices are holding at session highs and are seeing a slow boil higher in initial reaction to the data. June gold futures last traded at $1,751.50 an ounce, up 0.61% on the day.
Andrew Grantham, senior economist at CIBC, said that although some states are starting to ease lockdown measures, investors shouldn’t expect to see a significant rise in retail sales anytime soon.
“With restrictions on capacity in stores, consumer's still hesitant to venture out, and the impact of high unemployment on discretionary purchases, the path back up in retail sales activity will be much slower than the move lower has been,” he said.