(Kitco News) - The gold market continues to consolidate around a new psychological level at $4,700 an ounce, as consumption in the U.S. slows in line with expectations.
U.S. retail sales rose 0.5% in April, following March’s revised increase of 1.6%, the U.S. Commerce Department announced on Tuesday.
At the same time, retail sales increased 4.9% from April 2025.
The retail sales data rose in line with market expectations.
Core sales, which strip out vehicle sales, increased 0.7% last month, compared to March’s increase of 1.9%. Spending on core goods also met economists’ expectations.
The control group—which excludes sales from auto dealers, building-material retailers, gas stations, and office supply stores, and feeds directly into U.S. GDP—increased 0.5% in April. The data came in better than expected, as economists had forecast a 0.4% increase.
The gold market continues to hold critical support but is not seeing any major reaction to the latest economic data. Spot gold last traded at $4,705.37 an ounce, up 0.35% on the day.
Some economists note that although retail sales remain relatively healthy, the data are not adjusted for inflation, meaning that as prices rise, sales figures also increase. Inflation data released earlier this week showed a substantial rise in consumer prices.
A growing number of analysts have said that stagflation risks are increasing in the U.S. as rising inflation takes its toll on consumption growth. Higher inflation has been hurting gold as markets prepare for tighter monetary policy through the rest of the year; however, sentiment is beginning to shift back in gold’s favor as many investors and traders see the Federal Reserve becoming constrained as economic activity starts to slow.
Higher inflation and interest rates remaining at current levels will lead to lower real yields, reducing the opportunity cost of holding gold.
