Gold futures prices slipped Thursday, holding to lower ground even though a gold-positive development emerged in the latest retail sales data, which showed the biggest monthly drop in nine years.
Although a more cautious Federal Reserve — a shift seemingly backed by that latest figure from retailers — has been a market feature for weeks now, focus on the economy revs up as a tense geopolitical picture fades briefly into the backdrop amid progress to avoid another government shutdown and continued discussions over U.S.-China trade. Geopolitical rumblings tend to boost demand for haven precious metals.
For now, April gold GCJ9, -0.14% was off $1.90, or 0.1%, at $1,313.20 an ounce and is tracking about 0.7% lower for the week so far. The SPDR Gold Shares ETF GLD, +0.37% was little moved.
March silver SIH9, -0.97% fell 17 cents, or 1.1% to $15.48 an ounce.
The ICE U.S. Dollar Index DXY, -0.16% a measure of the U.S. currency against a basket of six major rivals, was near flat at 97.20. Gold and the dollar tend to move inversely.
Sales at retailers fizzled in December and posted the biggest decline in nine years in a worrisome sign for the U.S. economy, according to a long-delayed government report. Retail sales sank 1.2% in December, the U.S. Census Bureau said Thursday. It’s the largest drop since September 2009, a few months after the end of the Great Recession.
Investors are parsing the data for clues that back up the Federal Reserve’s plan to pause interest-rate hikes for now, a strategy shift at the central bank that has helped to drive gold up some 7% over a three-month stretch.
“The gold price doesn’t have much support from the geopolitics because the tensions between the U.S. and China seem to be easing off over the trade deal,” said Naeem Aslam, chief market analyst with Think Markets UK, in a note.
“Moreover, the chances of another U.S. government shutdown are also minuscule because it appears [President] Donald Trump is willing to work with Democrats,” Aslam said. “Thus, all these risk-off events aren’t going to support the gold price. The only hope for the bulls is that the Fed remains dovish and for that to happen we need to see the economic numbers remain only stable, not picking up any kind of momentum.”
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