(Kitco News) - The gold market is struggling at a key near-term support level as U.S. consumers appear to be in better shape, spending more money than economists had expected.
U.S. retail sales rose 0.6% in June, following May’s 0.9% decline, the U.S. Commerce Department announced Thursday. The data came in significantly stronger than anticipated, as economists were forecasting only a 0.1% increase.
Over the past 12 months, retail sales increased by 4.1%, according to the report.
At the same time, core sales—which exclude vehicle purchases—rose 0.5% last month, following a 0.2% decline in May. Core sales also beat expectations; economists were looking for a 0.3% increase.
The report also noted that the control group—which excludes sales from auto dealers, building materials retailers, gas stations, and office supply stores, and feeds directly into U.S. GDP—climbed 0.5%, surpassing expectations for a 0.3% increase. However, the previous month’s data was revised down to a 0.2% gain from the initial reading of 0.4%.
The gold market experienced sharp selling pressure in its initial reaction to the strong consumption data. Spot gold last traded at $3,314.50, down nearly 1% on the day.
Some analysts note that the latest retail sales figures will likely reinforce the Federal Reserve’s neutral monetary policy stance. The data shows that, despite relatively high interest rates, U.S. consumers remain resilient and continue to spend.
“The death of the consumer has been greatly exaggerated—as a blowout retail sales number shows that consumers are still spending and keeping the economy growing,” said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, in a note.
