Flat Retail Numbers Lift Gold

Flat Retail Numbers Lift Gold

Flat retail numbers lift gold which has been staying near a seven-year high as coronavirus fears continue to spark uncertainty about the economic impact of the illness.

Core U.S. retail sales were unchanged last month per the Commerce Department. Additionally, clothing-store sales had their biggest one-month decline since 2009. CNBC quotes Andrew Hunter, senior U.S. economist at Capital Economics, “Consumer spending is still struggling for momentum. That may also have been affected by the unseasonable weather, but there were also declines in electronics and health & personal care.”

The death and casualty toll from the coronavirus, now designated COVID19, spiked after China allowed health-care workers in Hubei province, the hardest hit part of the country, to classify a patient as having the disease on the basis of chest imaging, according to a series of tweets from the World Health Organization (WHO). In the rest of China and the rest of the world, laboratory confirmation, is still necessary.

The WHO said the change mostly affects older cases and that the trajectory of the disease’s progression hasn’t changed. The coronavirus, first detected in Wuhan, China, is a World Health Organization-designated global health emergency which has killed almost 1,400 people worldwide and sickened more than 64,000. Most of the cases have been in China.

Geopolitical uncertainty also boosted gold, after Reuters reported that the head of Iran’s Revolutionary Guards said that the country was ready to strike the United States and Israel if given a reason to do so. The U.S. Senate on Thursday passed a bipartisan war power resolution limiting President Donald Trump’s ability to strike Iran. But the dollar’s rally kept a lid on gold’s advance.

Front-month gold futures rose 0.5% Thursday to settle at $1,578.80 an ounce on Comex. The April contract gained 0.3% in the first four days of the week. Futures gained 4.3% in January, the best monthly performance since August. Currently, the April contract is at $1,584.30.

A move above $1,585 could give gold a boost to test the early-January high of $1,611, according to a technical analysis by FX Street. But a break to the downside from its recent range could send prices to $1,520 to $1,500, it said.

In economic news, the U.S. core consumer price index for January, a gauge of underlying inflation, rose 0.2% from December and 2.3% from a year earlier, Labor Department data showed. The reading — which excludes food and energy costs — matched estimates, Bloomberg reported. The broader CPI rose 0.1%, less than forecast, and the annual measure increased 2.5%, topping estimates. Initial jobless claims increased by 2,000 to 205,000 in the week to Feb. 8. Economists surveyed by MarketWatch had forecast a reading of 211,000.

Silver rose 0.7% Thursday to settle at $17.62 an ounce on Comex. The March futures contract is down 0.4% in the first four days of this week and retreated 1.8% last week. Silver futures rose 0.5% in January, lagging gold’s advance.

Spot palladium, a metal used primarily in autocatalysts, rose 1.4% Thursday and is up 4.9% so far this week. It climbed 18% last month, setting new records amid a supply crunch. Spot platinum rose 0.7% Thursday and gained 0.3% in the first four days of the week.


Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.