Gold drops as U.S. retail sales point to advancing U.S. economy
Published Aug 13, 2013 02:38PM ET
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,322.10 during U.S. afternoon hours, down 0.91%.
Gold prices hit a session low of USD1,318.20 a troy ounce and high of USD1,340.70 a troy ounce.
The December contract settled up 1.68% at USD1,334.20 a troy ounce on Monday.
Gold futures were likely to find support at USD1,272.10 a troy ounce, Thursday's low, and resistance at USD1,347.85, the high from July 23.
The Commerce Department reported earlier that retail sales rose by 0.2% in July, slightly below expectations for a 0.3% increase though an expansion nonetheless.
Retail sales figures for June were revised up to a 0.6% gain from a previously reported increase of 0.4%, the U.S. government added.
Core retail sales, which are stripped of automobile sales, rose at their fastest pace in seven months, expanding 0.5% compared to forecasts for a 0.4% gain.
The numbers prompted investors to trade on expectations that the Fed will begin tapering its USD85 billion monthly bond-buying program either in September or in December and wrap up the program in 2014, which ended a four-day winning streak for gold.
Monetary stimulus tools such as asset purchases drive down long-term borrowing costs, weakening the greenback in the progress, though talk of their dismantling often strengthens the U.S. currency and weakens gold as the two assets historically trade inversely with one another.
Also pressuring prices lower, India hiked taxes on imports as part of an ongoing effort to narrow the country's current account deficit.
Elsewhere on the Comex, silver for September delivery was up 0.47% at USD21.440 a troy ounce, while copper for September delivery was up 0.37% and trading at USD3.315 a pound.
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Written By: Investing.com
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