Gold price ticks up to daily highs as U.S. retail sales disappoint in October
Editor's Note: The article was updated to reflect changes in prices.
(Kitco News) Gold prices ticked up following worse-than-expected retail sales data from October.
U.S. retail sales rose 0.3% in October following a downwardly revised increase of 1.6% in September, according to the latest data from the U.S. Commerce Department. Economists were expecting to see an increase of 0.5% in last month’s headline number.
After the publication, December Comex gold futures edged up to daily highs, last trading at $1,890.90 down 0.16% on the day.
One of the weakest parts of the retail report was purchases of clothing and sporting goods as both contracted 4.2% in October.
Core sales, which strip out vehicle sales, advanced 0.2% last month versus the expected 0.6% increase.
The report’s control group, which strips out autos, gas, building materials, and food services, was up 0.1%, also disappointing expectations of 0.5% gain.
Retail sales could keep underperforming amid a surge in coronavirus cases as U.S. consumers avoid crowds and some businesses are temporarily shut down due to new restrictions, according to economists.
“The deterioration in the outlook on account of the escalation in virus cases suggests that growth will be even harder to come by in the months ahead, particularly in services categories. Spending on goods could also slow further as frontloaded purchases negate the need for further outlays in some categories, while tighter social distancing restrictions on gatherings over the holiday season could compound these effects,” said CIBC Capital Markets economist Katherine Judge.