Gold steady as investors eye US retail sales data

Gold prices held steady on Tuesday as investors awaited US retail sales data that could serve as an indicator of the strength of the world’s largest economy amid lingering concerns over global economic slowdown.

Spot gold was up 0.1 per cent at $ 1,415.19 per ounce, as of 0521 GMT.

US gold futures were up 0.2 per cent at $ 1,416.60 an ounce.

“Today we are sort of getting neutralised because we are heading into retail sales tonight. Investors are positioning realising there could be a knee-jerk reaction lower again if retail sales numbers come out strong,” said Stephen Innes, managing partner, Vanguard Markets.

However, “I don’t think it (retail sales data) is going to make a huge difference in overall scheme of things as far as the Fed narrative goes,” Innes added.

The US data, due later in the day, is expected to imply that retail sales had edged up 0.1 per cent in June, according to the median estimate of economists polled by Reuters.

Meanwhile, the dollar index was relatively unchanged against a basket of major currencies as the prospect of an interest rate cut by US central bank later this month kept the greenback on the defensive.

Markets have priced in a 25-basis-point cut by the Fed at its meeting at the end of this month.

Gold hit $ 1,438.63 for the first time in six years last month, supported by expectations of a rate cut by major central banks and concerns about the global economy.

Ahead of the release of US retail sales figures, signs of an improving economic situation in the United States on the back of strong jobs data have led to a steepening of the US yield curve, led by higher longer-dated yields.

“We are relatively neutral on gold at this stage, since we are not seeing much movement in other markets that could potentially impact it, namely, a clear direction for the dollar and US Treasury yields,” INTL FCStone analyst Edward Meir said in a note.

On the trade front, US Treasury Secretary Steven Mnuchin said he and US Trade Representative Robert Lighthizer would speak with their Chinese counterparts by phone again this week as part of the recently resumed trade talks.

Spot gold remains neutral in a narrow range of $ 1,404-$ 1,421 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver dipped 0.2 per cent to $ 15.35 per ounce and palladium fell 0.3 per cent to $ 1,562.99.

Platinum edged up 0.2 per cent to $ 841.21 an ounce, hovering near a two-month high of $ 846.53 hit in the previous session.