Forexpros – Gold futures turned lower during U.S. morning trade on Tuesday, dropping to the lowest levels of the session after stronger-than-expected U.S. retail sales data dampened hopes for further easing by the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,597.65 a troy ounce during U.S. morning trade, falling 0.8%.
Prices fell to as low as USD1,593.95 a troy ounce immediately following the release of the U.S. data, the lowest since August 3.
Gold futures were likely to find near-term support at USD1,587.05 a troy ounce, the low from August 3 and resistance at USD1,626.05, the previous session’s high.
Gold prices came under heavy selling pressure after official data showed that retail sales in the U.S. posted the largest monthly gain since February, easing concerns over the country’s economic outlook.
The U.S. Commerce Department said that retail sales rose by a seasonally adjusted 0.8% in July, easily surpassing expectations for a 0.3% increase.
Core retail sales, which exclude automobiles, rose 0.8%, more than the expected 0.4% increase and following a 0.8% decline in June.
A separate report showed that U.S. producer prices rose at the fastest pace in five months in July, climbing by a more-than-expected 0.3% after a 0.1% increase the previous month.
The reports eased concerns over the U.S. economic outlook and reduced expectations for further easing measures to boost growth.
Moves in the gold price this year have largely tracked shifting expectations as to whether the Federal Reserve would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 11% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal’s hedge, the greenback.
Market players are already beginning to focus on an annual meeting of economists and central bankers in Jackson Hole, Wyoming, at the end of August, as well as the Fed’s next policy meeting in September for clues on the central bank’s attitude towards a next round of bond purchases, known as quantitative easing.
Elsewhere on the Comex, silver for September delivery shed 0.35% to trade at USD27.67 a troy ounce, while copper for September delivery added 0.4% to trade at USD3.366 a pound.
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