Gold price at daily highs as U.S. retail sales drop in February
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) The gold market was trading near its new daily highs after retail sales fell in February, showing that consumers are slowing their activity after a strong start to the year.
U.S. retail sales dropped 0.4% last month following a jump of 3.2% in January, according to the latest data from the U.S. Commerce Department. Economists were expecting to see a decrease of 0.3% in last month’s headline number.
Core sales, which strip out vehicle sales, fell 0.1% last month, which was in line with market expectations. The report’s control group, which strips out autos, gas, building materials, and food services, was in contrast to the rest of the report, rising 0.5% versus the expected 0.3% drop.
Retail spending is likely to see further declines as the banking contagion fear restricts spending and the weather returns to more seasonal norms after warm January and February, said Capital Economics deputy chief U.S. economist Andrew Hunter.
“The fall in retail sales in February only partly reversed the 3.2% surge in January. But there is a risk that, to the extent the unseasonably mild weather played a role in the opening two months of the year, that impact will be unwound as the weather returns to seasonal norms in March,” Hunter said Wednesday. “A loss of confidence in the wake of the SVB collapse could also hit spending this month.”
Immediately after the data release, gold held near its daily highs after already registering solid early-morning gains. April Comex gold futures fell last traded at $1,928, up 0.89% on the day.
Aside from slowing retail sales activity, gold was also reacting to fears that the banking crisis was yet to be contained. European banking stocks shares tumbled Wednesday, with markets shaky after Credit Suisse shares dropped more than 20%.