Gold Back in Demand After US Retail Sales Decline for the First Time in Seven Months
On Thursday, gold prices are trading steady on the back of disappointing retail sales data out of the US, which has raised concerns about the health of the US economy. At the time of writing, GOLD is trading at a little above $1,488.
US retail sales posted their first decline in seven months during September, falling by 0.3% when compared to a revised +0.6% gain seen in August. The figure came in worse than the forecast, which was for a 0.3% rise instead. Retail sales is a key indicator of economic health and consumer confidence.
Markets were concerned about the rising risks of a possible recession in the US economy following the release of the weak retail sales data, boosting the demand for the safe haven gold. This latest data release has once again heightened the chances of a rate cut by the Federal Reserve in October, which has further boosted the appeal of the precious metal.
Gold, however, trades under the $1,500 level as a result of the optimism in markets for a Brexit deal. The EU summit starts today and expectations are high for an announcement of such a deal offering clarity on Britain’s departure from the EU a couple of weeks from now.
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