Gold surrendered $13 in overnight gains when the retail sales report for April was released at 8:30 this morning. The news also temporarily propelled the dollar to a six-month high. The scenario repeated itself at 10 am, when consumer sentiment also surprised to the upside, rising from 89.0 to 95.8. Analysts expected a read of 89.7.
Spot gold is bouncing up and down on the $1,262 mark, near yesterday's close. The morning high is standing at $1,273. These numbers are coincidentally our first level of support and resistance. If $1,262 fails to hold, the next stop is $1,257. If gold prices pierce the $1,273 mark, $1,281 should prove to be the next hurdle.
The 1.3% increase in retail sales month over month was the biggest jump in 13 months. Retail sales in March had fallen 0.3%. The report was welcome news to a market that had been battered by falling sales at high end retailers like Nordstrom and Macy's, as well as at JC Penny's. It may simply be that consumer shopping has in large part moved online (hello, Amazon Prime.) Later in the morning, consumer sentiment beat estimates, to rise to the highest level so far in 2016
The yen reversed its rise Thursday, as the Bank of Japan tried to scare speculators by intimating further easing measures. The Fed, in its turn, talked up imminent rate hikes, to further lift the dollar. Cleveland Fed president Loretta Mester and Boston Fed president Eric Rosengren both talked about inflation starting to grow, and the need for the Fed to consider hiking interest rates soon.
All this talk pulled gold down from a nice rally, Spot gold lost $13.50 (-1.06%) to close at $1,263.20. June gold futures settled $4.30 lower, to $1,271.20.
Oil prices oscillated on dueling sentiment on a growing global oil glut, and temporary production shortages in Canada and Nigeria (which were wiping out daily global surpluses.)
West Texas Intermediate crude for June delivery recovered earlier losses to settle at $46.70 a barrel. Brent futures rose to $48.08. If prices get much higher, US oil production may start growing again. A price around $50 a barrel will make many shale oil wells profitable again.
Bad news from Apple and Macy's tore into major stock indices in New York yesterday, but hte Dow and S&P 500 managed to close basically flat. The Nasdaq wasn't as lucky, losing almost a half-percent.
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