Gold prices ignore 0.6% rise in U.S. retail sales
The gold market continues to see a persistent bid in the marketplace even as better-than-expected U.S. retail sales point to healthy consumption, which will further support economic activity.
U.S. retail sales rose 0.6% in February, following January’s revised decline of 0.1%, the U.S. Commerce Department announced on Wednesday
The data was actually better than expectations, as the consensus of economists projected a 0.5% decrease in February's headline number.
In annual terms, retail sales increased 3.7%, the report said, compared to 3.2% increase in January.
Core sales, which strip out vehicle sales, rose 0.5%, and beat consensus estimates looking for a 0.3% increase.
Meanwhile, the report said that the control group – excluding sales from auto dealers, building-materials retailers, gas stations, and office supply stores – which also feeds directly into U.S. GDP, increased 0.5%, beating expectations for an increase of 0.3%.
The gold market is not seeing any new volatility in the initial reaction to the better-than-expected economic data. Spot gold last traded at $4,735.90 an ounce, up nearly 1.5% on the day.
Traditionally, positive retail sales data should be negative for gold as it shows U.S. consumers are fairly resilient, which means the Federal Reserve has room to deal with rising inflation pressure by keeping interest rates unchanged for longer than expected. This environment will keep gold’s opportunity costs elevated.
