Forexpros –
Forexpros – Gold futures slipped lower during U.S. trade Tuesday, continuing the previous session’s losses as investors sell the precious metal in reaction to strong U.S. economic data.
However, ongoing expectations that policy makers around the world will announce fresh stimulus measures to help spur weak global growth continued to support the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,600.35 a troy ounce during U.S. trade, falling 0.64%.
Gold futures were likely to find support at USD1,593.95 a troy ounce, the session’s low and near-term resistance at USD1,626.05, the previous session’s high.
Gold prices have been well-supported in recent sessions, amid ongoing expectations that central banks in the U.S., Europe and China will soon announce fresh stimulus measures to help spur growth in their respective economies.
Investors were eyeing the release of euro zone growth data later in the day, after a report earlier showed that Germany’s economy slowed less-than-expected in the second quarter.
Germany’s gross domestic product expanded by 0.3% in the three months to June, beating expectations for a 0.2% expansion and following an expansion of 0.5% in the first quarter.
A separate report showed that France’s economy stagnated in the second quarter, beating expectations for a 0.1% contraction.
Gold slipped as retail sales in the U.S. rose for the first time in four months in July, posting the largest monthly gain since February, official data showed on Tuesday.
The U.S. Census Bureau said that retail sales rose by a seasonally adjusted 0.8% in July, easily surpassing expectations for a 0.3% increase.
Retail sales in June were revised to a 0.7% decline from a previously reported drop of 0.5%.
Year-on-year, retail sales rose at an annualized rate of 3.2% in July, after advancing at a rate of 2.6% in the previous month.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude automobile sales, rose by 0.8% last month. Analysts had expected core retail sales to increase 0.4% last month, after falling by a downwardly revised 0.8% in June.
On an annualized rate, core retail sales rose 3.2% last month, after rising 2.6% in June.
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.
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 traders 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 on September 12 and 13 for clues on the central bank’s attitude towards a next round of bond purchases, known as quantitative easing.
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.
Elsewhere on the Comex, silver for September delivery gave back 0.10% to trade at USD27.74 a troy ounce, while copper for September delivery added 0.08% to trade at USD3.356 a pound.
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