U.S. retail sales miss expectations in April, gold price ticks up but trades under pressure

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 edged up but largely ignored retail sales coming in short of market expectations in April, which showed consumers slowing their activity.

U.S. retail sales rose 0.4% last month following a downwardly revised drop of 0.7% in March, according to the latest data from the U.S. Commerce Department. Market consensus calls expected an increase of 0.8% in April’s headline number.

Immediately after the data release, gold rose from daily lows, with June Comex gold futures last trading at $2,017.90, down 0.24% on the day.  

Core sales, which strip out vehicle sales, were up 0.4% last month, which was in line with market expectations. The report’s control group, which strips out autos, gas, building materials, and food services, beat expectations, advancing 0.7% versus the projected 0.3%.

The fact that retail spending was still growing in April indicated that the Federal Reserve’s higher rates and tighter credit conditions are yet to hit the U.S. consumer, said Capital Economics deputy chief U.S. economist Andrew Hunter.

“With the April gain coming after two months of declines, real consumption growth is still likely to slow quite sharply in the second quarter,” Hunter said. “As the labour market continues to cool and the drag from the Fed’s aggressive monetary tightening feeds through, we suspect a further slowdown lies ahead.”