On Thursday, the precious safe-haven yellow-metal gold futures’ prices slipped more than 3 per cent and economic bellwether copper contracts had indented over 5 per cent, as a strong US retail sales data had spurred up the American Dollar against most major and emerging market currencies, easing the applecart of gold contracts’ safe-haven bid while prompting investors to bank on a quicker-than-anticipated tapering of fiscal support from the US Federal Reserve.
In point of fact, in the day’s hefty whiplash in spot gold prices came forth as an unprecedented uptick in US retail sales had led to a Apollonian rally in US Dollar Index (DXY) measured against a gauge of six major currencies on an average, while soaring US Treasury bond yields also had suppressed the bullion.
Earlier in the day, US Commerce Department said in a statement that US retail sales surged by 0.7 per cent in August, wildly beating an analysts’ estimate of a decline of 0.8 per cent, building a solid case for the US Federal Reserve to taper its m onthly $120 billion bond repurchase program.
Besides, followed by the announcement, 10-year Treasury bond notes climbed to 1.33 per cent, while the US Dollar Index (DXY) gained 0.43 per cent to 92.81, blunting the bullion’s safe-haven appetite.
Gold beats a hasty retreat as US Dollar jumps after US retail sales data
Citing statistics, in the day’s commodity market wind-down, spot gold fell 2.1 per cent to $1,755.75 an ounce after hitting a one-month low of $1,744.30 an ounce earlier in the session, while US gold futures settled 2.1 per cent lower at $1,756.70 an ounce.
Economic bellwether lost nearly 5 per cent to $22.79, while platinum contracts dropped 1.7 per cent to $930.52 an ounce. Meanwhile, addressing to a surprise rise in US retail sales last month that appeared to have caught both gold and copper contracts’ prices off guard, a senior market strategist at RJO Futures, Bob Haberkorn said, “Gold has taken a pretty big hit. you have longs running for the exit”.