Gold firm as US data lowers rate hike prospects
GOLD held steady on Monday as sluggish US retail sales data on Friday lowered expectations of a near-term interest rate hike by the Federal Reserve.
Spot gold was up 0.3 per cent at US$1,339.12 an ounce at 0352 GMT. The metal rose as much as 1.4 per cent to a high of US$1,355.80 on Friday, but ended slightly lower on profit-taking.
US gold was nearly unchanged at US$1,344.40 an ounce.
US retail sales were unexpectedly flat in July as Americans cut back on purchases of clothing and other goods, signalling a moderation in consumer spending that could lessen the expectations of faster economic growth in the third quarter.
“The US macro data is very mixed and expectations of a rate hike are already priced in gold,” said Helen Lau, analyst at Argonaut Securities in Hong Kong.
“The gold supply is coming back, but overall demand is not good. From now, we need more catalyst to drive the investment demand higher in order to offset the supply increase from gold miners.”
The dollar was on the defensive on Monday, weighed down by the US retail sales data.
A stronger dollar discourages gold buying by making the metal more expensive in other currencies.
SummerholidaysintheNorthern hemisphere are also keeping gold in check, with trading thin and range-bound, said Sam Laughlin, precious meals trader with MKS PAMP Group.
“We don’t expect to move too far outside of the US$1,330 to US$1,360 range over the short term,” Laughlin said. — Reuters