Gold Rises After Soft US Retail Sales

Gold prices are higher and hit a two-week high in early U.S. trading Wednesday, following a U.S. retail sales report that did not meet market expectations. June gold futures pushed above the important $1,200.00 level. Silver prices hit a six-week high above $17.00 an ounce. Short covering in the futures market and bargain hunting in the cash market are featured. Some slight safe-haven demand is also seen. June Comex gold was last up $12.10 at $1,204.50 an ounce. July Comex silver was last up $0.519 at $17.04 an ounce.

U.S. retail sales for April came in unchanged from March, when a 0.2% rise was expected. The retail sales report is one of the most important U.S. economic data points of the month. The U.S. dollar index slumped on the news and is hovering near a four-month low.

World bond markets have stabilized Wednesday, following the recent rout of many countries’ bonds. The recent world bond market sell-off in prices (rising yields) has spilled over into selling pressure in many major world stock markets. The world bond market jitters have also provided some increased demand for safe-haven gold.

In overnight news, Euro zone first-quarter GDP came in at up 0.4% from the fourth quarter of last year and up 1.6% year-on-year. European stock markets were buoyed on the upbeat economic news.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza