Investing.com -- Gold fell slightly on Friday, even as a wave of lackadaisical economic data dampened optimism for an imminent rate hike from the Federal Reserve, as a key technical gauge provided signals that the strongest rally in three decades could be on the verge of receding.
On the Comex division of the New York Mercantile Exchange, Gold for December delivery traded between $1,338.90 and $1,361.65 an ounce before settling at $1,343.05, down 6.95 or 0.51% on the session. After opening around $1,330 an ounce on Monday, Gold edged up marginally over the last five sessions to close in positive territory for the week. While Gold has surged by more than 25% year to date, the precious metal has fallen back by approximately $30 an ounce since hitting 28-month highs in early-July.
On Friday morning, the U.S. Bureau of the Census said that retail sales were unchanged in July on a monthly basis, falling sharply below expectations for a 0.4% gain. The pace of consumer spending slowed in July, one month after sales soared by 0.6% for the period. Purchases across numerous categories largely dried up for the second month of the summer with the exception of auto sales which jumped by 1.1%. As a result, retail sales minus auto purchases dipped by 0.3% for July, marking its first decline since March.
Separately, the University of Michigan's flash Consumer Sentiment Index for August came in relatively flat at 90.4, finishing under analysts' forecasts of a 1.0 gain to 91.0. Weakness was seen in Current Conditions which plunged by 2.9 points for the period to 106.1. At the same time, the Expectations component jumped 3.5% to 80.3, reflecting rising confidence in the near-term jobs outlook throughout the U.S.
Earlier, the U.S. Bureau of Labor Statistics (BLS) said its Producer Price Index for Final Demand (PPI-FD) retreated by 0.4% in July, defying expectations from analysts of a slight 0.1% gain, The subdued reading halted any momentum gained from a stellar report in June when the PPI-FD soared by 0.5%. Core PPI-FD, which strips out volatile food and energy prices, also fell by 0.3%. The sluggish inflation data could provide ammunition for dovish members of the Federal Reserve in their arguments for a delayed interest rate hike.
Any rate hikes by the U.S. central bank this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell by more than 0.35% to an intraday low of 95.19. Since hitting a four-month high at 97.62 in late-July, the Dollar has fallen back by approximately 2%.
Dollar-denominated commodities such as Gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for September delivery fell 0.278 or 1.39% to 19.742 an ounce.
Copper for September delivery lost 0.051 or 2.33% to 2.140 a pound