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Gold price under pressure but largely ignores 0.6% rise in U.S. retail sales

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(Kitco News) - The gold market remains under pressure as more Americans kicked off the summer season with a shopping spree.

U.S. retail sales rose 0.6% last month, following May's revised drop of 1.7% according to the latest data from the U.S. Commerce Department, released Friday; The retail sales numbers significantly beat expectations as economists were forecasting a drop of 0.4%.

For the year, the report said that headline retail sales numbers are up 18%; however, last year, most Americas were confined to their homes due to government-imposed lockdowns.

Meanwhile, core retail sales, which strips out auto sales, increased 1.3% last month, following May's drop of 0.7%%. Core sales also beat expectations, with consensus forecasts calling for a 0.4% rise.

The control group, which excludes autos, gas, building materials, and food services and feeds directly into GDP, rose 1.1%. Economists were expecting to see a 0.4% increase.

While gold prices are trading in negative territory, the latest economic data is having little impact on the price action. August gold futures last traded at $1,822 an ounce, down 0.38% on the day.

Although retail sales were better than expected, Paul Ashworth, chief U.S. economist at Capital Economics, said that he doesn't expect the momentum to be sustainable.

"Given the revisions, we still think that real consumption growth was close to 10% annualised in the second quarter, with GDP growth a little above 8%. But there is little momentum going into the third quarter, when we expect consumption growth to slow to less than 3%, with GDP growth at 3.5%," he said in a research note.

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