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Gold Faces Pressure on Retail Sales, Hedge Fund Bears

March 11, 2019 at 17:26 by Andrew Moran

Gold futures are trading lower to kick off the trading week as a better-than-expected retail sales report put pressure on the precious metal. Gold prices were also impacted by new US government data that found hedge funds sold their bullion holdings ahead of last week’s disappointing jobs report.

April gold futures tumbled $6.80, or 0.52%, to $1,292.50 per ounce at 16:54 GMT on Monday. The yellow metal posted a tepid weekly gain of 0.3% last week, leaving gold sideways so far this year.

Silver, the sister commodity to gold, is also in the red to start the trading week. May silver futures shed $0.075, or 0.49%, to $15.275 an ounce. The white metal recorded a weekly drop of 1%, lowering its year-to-date decline to about 2%.

According to the Department of Commerce, US retail sales slightly rebounded in January as they rose 0.2%. This beat the median estimate of 0.1%, and it comes one month after suffering the biggest drop in a decade. If automobile and gasoline sales are taken out of the report, then January retail sales climbed a healthy 1.2%.

The US Census Bureau reported that business inventories increased 0.6% in December. The ratio of inventories to sales – how many months it would take to sell all the inventory on hand – jumped from 1.36 to 1.38.

In other data, the Commodity Futures Trading Commission (CFTC) found that hedge funds and money managers slashed their bullion holdings by 54% to 47,872 futures and options contracts in the week ending March 5. This occurred right before the release of the lackluster February jobs report, which showed the economy added just 20,000 new jobs.

The US dollar somewhat lifted the metals market as the greenback dipped 0.05% to 97.31. A weaker buck is good for commodities pegged in dollars because it makes it cheaper for foreign investors to purchase.

In other metal commodities, May copper futures rose $0.01, or 0.33%, to $2.90 a pound. May platinum futures slipped $3.60, or 0.44%, to $814.00 an ounce. May palladium futures surged $19.00, or 1.3%, to $1,478.00 per ounce.

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