Gold prices fell another 1 percent on Monday, hovering near two week lows as stronger US retail sales data inspired economic hopes and reduced the safe haven bid for gold, whilst the US dollar remained strong against major currencies.
Latest Gold Price
Spot gold dropped 1.1 percent to $1,431.49 an ounce by 19:37 GMT yesterday. Earlier in the session, it hit a low of $1,426.40 an ounce, near a two week low of $1,420. US gold futures for June delivery settled down $2.30 at $1,434.30 an ounce, with trading volume about 25 percent below its 30-day average, preliminary Reuters data showed.
However gold is trading higher this morning and hit a high of $1,444.96 an ounce and stood at $1,440.66 by 04:19 GMT, up $10.61.
Gold to Continue Downwards?
“Stocks are looking more attractive for investors. Gold will continue in the downward trend. It might test $1,400,” said Brian Lan, managing director of Gold Silver Central, Singapore. “I don’t see any data that could possibly push gold prices up.”
Gold fell for a third session on Monday after the Commerce Department said US retail sales unexpectedly rose in April, pointing to underlying strength in the economy. A surprise rise in US retail sales in April strengthened the view that the US economy remains resilient, damping speculation the Federal Reserve will extend its bullion friendly bond buying programme.
“In our view, there is greater risk of physical demand slowing further, rather than sizeable ETP inflows, thus posing downside risk to prices in the near term,” said Suki Cooper, precious metals strategist at Barclays Capital.
Strong Dollar and Gold Prices
The metal was also under pressure as the dollar initially gained versus the euro after European Central Bank policymaker Ignazio Visco said if the euro zone economy needed more help, the deposit rate could be cut to negative territory.
The US dollar has since reversed gains against the euro but edged higher against a basket of major currencies, as seen by the recent surge in the US Dollar Index.
A report by the Commodity Futures Trading Commission (CFTC) showed hedge funds and money managers trimmed their bullish bets in gold futures and options in the week to May 7 on weaker bullion prices and outflows in gold exchange traded funds.
This week, gold will likely take trading cues from a busy schedule of US economic indicators including producer prices, consumer price index and consumer confidence.
Gold prices have recovered about $120 since the big sell off in April which dragged prices to two year lows, but gold is still well below last month’s peak of around $1,600, as investors shifted into equities and cut exposure to bullion.
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Gold price hovers near $1440 on strong dollar and US retail data
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