Gold price fell slightly lower on stronger US data out last night but maintained comfortably above the $1,200 level.
The dollar index edged higher but gold was little impacted, indicating some strong underlying support for the precious metals. Dollar gains were aided by US unemployment claims coming in at 294,000, which beat the forecast 299,000, as did retail sales at 0.7 percent and core retail sales at 0.5 percent.
In other data, US import prices at -1.5 percent also beat forecasts while business inventories were in line with expectations at 0.2 percent.
“That said, consumer spending tends to be volatile and the solid report from November may very well be a one-off in light of the holiday season. We will require further consistency in retail sales numbers before concluding that retail sales have rebounded in the US,” commented Howie Lee, investment analyst at broker Phillip Futures.
Gold price was last at $1,224.7, about $2 lower than where it ended on Thursday.
Going forward, the last FOMC meeting for the year could be a key risk factor for gold.
“There has been talk that the FOMC meeting next week will see the committee removing the all-important phrase “considerable time” from their minutes; if that happens, it ought to send gold plummeting heavily as the rate hike draws nearer. Gold’s recent climb means the space for downside now presents more opportunities than upside potential,” Lee added.
Silver price looked more firm, holding steady overnight at $17.1 but declined slightly this morning to $17.08 per ounce. There were significant outflow in silver ETFs, which saw investors taking profit after the recent rise in prices. On the retail side however, the US Mint reported that 43.05 million ounces of Amercian Eagle silver coins have been sold so far this year, outperforming the entire year of sales in 2013.
In the other precious metals, platinum is three dollara lower at $1,237 while palladium is a dollar lower at $818 per ounce.
The post Gold takes a breather, FOMC meeting next week may provide impetus appeared first on The Bullion Desk.
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