Despite some disappointing retail sales numbers in the U.S. released this morning, gold prices (as well as the other precious metals) were struggling to break into positive territory on Friday. Spot gold was down roughly 0.4% to $1,323 per ounce in early trading, recovering a bit from an initial tumble when the market hit a road block at the $1,330/oz level. Spot silver fell almost 0.8% to below $17.65/oz while platinum (-1.5%) and palladium (-0.75%) each trended lower.
Nonetheless, the precious metals have managed not to move too far in reverse once safe-haven demand eased following the pair of hurricanes that battered the Southeastern U.S. the last two weeks. Even amid a predictable amount of profit-taking, it's an encouraging sign that the gold market hasn't crashed back below the $1,300/oz mark, and remains comfortably above this level.
Wall St opened mixed but mostly lower on Friday thanks to a broad-based drop in retail sales in the U.S. during August. Overall, sales fell 0.2% during the month according to the Department of Commerce. This surprised analysts, who had predicted a slight increase. Moreover, the retail numbers for July and June were revised sharply lower: July's 0.6% increase was cut in half to +0.3%, while the 0.3% gain initially reported for June was updated to show a 0.1% decrease. August's decline was the biggest drop for the measure in at least six months. Output from American factories also was hit hard during August, but this was mainly on account of Hurricane Harvey in Texas.
This contributed to the U.S. dollar getting dragged 0.5% lower on the DXY index to just 91.7. Treasury yields were mostly steady, with the 10-year T-note holding around 2.19%. Although the euro, the biggest component of the DXY basket, was stronger by about 0.4%, the biggest mover in the foreign exchange market was the British pound. Sterling advanced an impressive 1.4% today to trade at $1.36, which caused stocks in London to tumble by 1.2% on the FTSE 100. The firmer pound sterling is the direct result of higher inflation in the U.K. and thus greater expectations that interest rates in the country are slated to go up. These expectations, in turn, have been spurred along by the more hawkish tone being struck by even the most dovish policymakers at the Bank of England.
In other financial news, the emerging cryptocurrency Bitcoin has seen its market crash—yet again—thanks to at least two factors: China cracking down on Bitcoin exchanges and ICOs (Initial Coin Offerings, the equivalent of an Initial Public Offering, or IPO, for a normal security) and prominent comments denigrating the digital "currency" as a bubble. The BTC price took a nosedive this week, sinking from nearly $5,000 per Bitcoin to about $3,000.
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