Gold was steady above $1,200 on Thursday morning after yesterday’s rally in which the yellow metal hit its strongest in five weeks on a run of forecast-missing numbers.
The spot gold price was last at $1,215.00/1,216.00 per ounce, up just 30 cents on Wednesday’s close. Trade has ranged from $1,212.2 to $1,219.5 so far.
A softer dollar has helped to support gold – the euro peaked at 1.1431 against the dollar, its highest since February, before drifting back to a still-firm 1.405.
US retail sales at 0.0 percent missed consensus of 0.3 percent while the core figure at 0.1 percent fell short of the expected 0.4 percent. Import prices at -0.3 percent undershot the forecast 0.3 percent.
“Gold’s price reaction to the retail sales data suggests a relatively high sensitivity to US economic data releases, especially as it relates to the Fed’s lift-off’ of rates expectations,” HSBC analyst James Steel said. “The recent price rally came in lieu of physical buying, which suggests to us that the paper markets may have been the primary driver of the rally.”
The members of the Federal Reserve’s policy board are locked in what has become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008. The current market consensus is that the first increase will happen sometime in the second half of this year.
After a busy Wednesday, the economic agenda is focused today on the US while much of Europe is closed for Ascension Day – US data includes the PPI and initial jobless claims. Traders may prefer to stick to the sidelines of the market before the release of the latter given the emphasis the Fed has placed on data and the jobs market in deciding when to start normalising monetary policy.
“While we do not discount the possibility of further price gains in the near term, bullion may need to break over the technical 200-day moving average of $1,218 per ounce in order for the rally to be sustained. Barring this, gold prices may consolidate from recent gains in the near term,” Steel said.
In the other precious metals, silver was last at $17.15/17.20 per ounce, up three cents. Platinum at $1,145/1,150 was unchanged and palladium at $781/786 was down $2.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)
The post Gold price steady above $1,200/oz ahead of more US data appeared first on The Bullion Desk.
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