Published: Mon, July 17, 2017
Business | By Max Garcia

Gold futures rise after weak United States inflation, retail data

Gold futures rise after weak United States inflation, retail data

The Australian dollar closed at its highest level for more than 2 years overnight Friday of 78.38 U.S. cents, boosted by weak data in the USA which has cast doubt on the Fed's current interest rate policy.

The most active gold contract for August delivery rose 10.2 USA dollars, or 0.84 percent, to settle at 1,227.50 dollars per ounce. It got a solid lift overnight Friday from weak USA inflation, retail sales and consumer sentiment figure but ground lower over the session. It was up 1.6pc for the week so far, which would be its biggest weekly gain since mid May.

The kiwi traded at 73.30 USA cents as at 5pm in Wellington versus 73.42 U.S. cents as at 8am in Wellington and 73.45 cents in late NY trading on Friday.

Hedge funds and money managers cut their net long position in COMEX gold to the smallest since January 2016 in the week to July 11, as they switched to their first bearish stance in silver in almost two years, US Commodity Futures Trading Commission data showed on Friday. Interest rate markets are now tipping the first rate hike to come in June 2018 versus the central bank's forecast of September 2019. The grey metal was trading at session highs, having rebounded from an earlier loss. "We're seeing precious (prices) buoyed on the back of that". United States gold futures for August delivery rose 0.24 percent to $1,230.50 per ounce.

A stronger greenback would weigh on gold, making the dollar-priced commodity more expensive for investors holding other currencies.

"We remain neutral on gold at this point as the dollar's short-term trend is inconclusive, allowing higher yields to fill the space and throttle any gold rallies", said INTL FCStone analyst Edward Meir.

Meanwhile, SPDR Gold Trust slipped 0.43% to 828.84 tonnes on Thursday from 832.39 tonnes on Wednesday. Retail Sales are expected to rise 0.1%, up from -0.3% and Core Retail Sales are estimated at 0.2%, up from 0.1%.

In silver, there was a sharp split between funds, which had largely sold off their record long position, and ETF investors, who had been recently buying, Hansen said.

Palladium gained 0.81 per cent at US$858.65 per ounce and was set to end the week 2.4 per cent higher. Platinum rose 0.6 percent to $906.70 per ounce.

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