Gold inches down as strong US retail sales lift dollar

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Published: July 17, 2019 8:04:25 AM

Spot gold was down 0.1% at $1,405.26 per ounce, as of 0104 GMT.

Gold prices, US retail sales,  Spot gold, dollar, US gold futuresU.S. gold futures slipped 0.3% to ,406.90 an ounce. (Reuters)

Gold prices edged lower on Wednesday, but still held above the pyschological $1,400 level, as the dollar gained after robust U.S. retail sales tempered fears of a sharp downturn in the world’s largest economy.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,405.26 per ounce, as of 0104 GMT.

* U.S. gold futures slipped 0.3% to $1,406.90 an ounce.

* The Commerce Department said retail sales rose 0.4% last month as households stepped up purchases of motor vehicles and a variety of other goods. Economists polled by Reuters had forecast retail sales edging up 0.1% in June.

Also read: Oil prices steady after falling to more than one-week lows

* The dollar was firm on Wednesday after upbeat U.S. data tempered expectations of aggressive policy easing by the Federal Reserve later this month.

* The dollar index against a basket of six major currencies was effectively unchanged at 97.363 after gaining 0.5% the previous day.

* U.S. Treasury yields also rose on strong data, adding to recent evidence that the economy is improving.

* However, Fed Chairman Jerome Powell on Tuesday reiterated pledges to “act as appropriate” to keep the U.S. economy humming, in a speech that did not deviate from expectations that a rate cut is on the way.

* Futures are 100% priced for a cut of 25 basis points, and imply a 27% chance of 50 basis points.

* Meanwhile, President Donald Trump said on Tuesday the United States still has a long way to go to conclude a trade deal with China but could impose tariffs on an additional $325 billion worth of Chinese goods if it needed to do so.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 799.37 tonnes on Tuesday from 800.54 tonnes on Monday.

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