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Gold turns higher after U.S. retail sales disappoint

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Investing.com -

Investing.com - Gold futures erased losses to trade modestly higher on Wednesday, after official data showed that U.S. retail sales were flat in July, dampening optimism over the strength of the economic recovery.

On the Comex division of the New York Mercantile Exchange, gold for December delivery tacked on 0.24%, or $3.10, to trade at $1,313.70 a troy ounce during U.S. morning hours.

Prices held in a narrow range between $1,306.10 and $1,312.80 an ounce. A day earlier, gold prices eased up 0.01%, or 10 cents, to settle at $1,310.60.

Futures were likely to find support at $1,288.50, the low from August 6 and resistance at $1,324.30, the high from August 8.

Gold turned higher after the U.S. Commerce Department said that retail sales were little changed last month, disappointing expectations for a 0.2% increase.

Core retail sales, which exclude automobile sales, eased up by a seasonally adjusted 0.1% in July, below forecasts for a 0.4% increase.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.

Meanwhile, in Ukraine, a Russian convoy of 280 trucks carrying humanitarian aid headed for the border amid Western warnings against using help as a pretext for an invasion.

Elsewhere, the U.S. sent about 130 additional military personnel to Iraq on Tuesday, after recently launching air strikes targeting jihadi militants from the Islamic State insurgent group in the northern part of the country.

Gold is often seen as a haven investment in times of geopolitical uncertainty.

Also on the Comex, silver for September delivery rose 0.62%, or 12.3 cents, to trade at $20.04 a troy ounce.

Elsewhere in metals trading, copper for September delivery slumped 0.72%, or 2.3 cents, to trade at a seven-week low of $3.132 a pound after disappointing Chinese economic data fuelled concerns over the health of the world's second largest economy.

Official data released earlier showed that industrial production in China rose at an annualized rate of 9% in July, in line with forecasts and slowing from an increase of 9.2% a month earlier.

Fixed asset investment, which tracks construction activity, increased 17.0% in the January-July period, below expectations for a gain of 17.4% and slowing from 17.3% in the January-June period.

Meanwhile, Chinese bank lending and money supply growth for July also came in below expectations, underlining concerns about slowing growth in the world's biggest consumer of the industrial metal.

Chinese new loans dropped to 385.2 billion yuan last month from 1.08 trillion yuan in June and missed forecasts of 780 billion yuan.

The broad M2 money supply rose 13.5% on year in July, compared to growth of 14.7% a month earlier and below forecast for a 14.5% increase.

China's total social financing aggregate, a broad measure of liquidity in the economy, fell to 273.1 billion yuan in July, the lowest monthly reading since October 2008.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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