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Gold moves higher after U.S. retail sales miss, Fed in focus

Published 07/15/2013, 09:55 AM
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Investing.com - Gold futures moved higher on Monday, after U.S. retail sales figures missed expectations in June, fuelling fears that the economic recovery is losing momentum.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,284.75 a troy ounce during U.S. morning hours, up 0.6% on the day.

Comex gold prices held in a tight USD20-range between USD1,273345, the daily low and a session high of USD1,293.55 a troy ounce.

Comex gold prices rose to USD1,297.05 a troy ounce on July 11, the strongest level since June 24.

Gold futures were likely to find support at USD1,237.05 a troy ounce, the low from July 8 and near-term resistance at USD1,301.75, the high from June 21.

The Commerce Department said U.S. retail sales rose 0.4% in June, slowing from a 0.5% increase in May and undershooting expectations for a 0.8% increase.

Core retail sales, which exclude automobile sales, were flat last month, compared to expectations for a 0.4% increase.

A separate report showed that the Empire State manufacturing index rose to a five-month high of 9.5 in July from 7.8 in June. Economists had forecast a reading of 5.0.

The precious metal remained support as fears of an imminent winding down of the Federal Reserve's monetary stimulus eased for now.

Gold prices rallied 5% last week, the biggest weekly gain since October 2011, after Federal Reserve Chairman Ben Bernanke said the central bank will continue to maintain accommodative monetary policy for the foreseeable future.

Bernanke is due to testify to Congress on Wednesday and Thursday.

Gold prices are on track to post a loss of 23% on the year, the worst yearly decline since 1981, amid speculation the Fed will start to unwind its stimulus program by the year's end.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, silver for September delivery rose 0.3% to trade at USD19.84 a troy ounce, while copper for September delivery fell 0.5% to trade at USD3.140 a pound.

Official data released earlier showed that China’s economy expanded 7.5% in the second quarter from a year earlier, in line with market expectations and slowing from a 7.7% increase in the preceding quarter.

A separate report showed that industrial production in China rose 8.9% in June, below expectations for a 9.1% increase and following a 9.2% gain the previous month.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

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