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Gold prices dip in Asia despite dollar easing in intraday trade

Published 01/14/2015, 08:14 PM
Updated 01/14/2015, 08:15 PM
Gold weaker in Asia

Investing.com - Gold prices eased in Asia on Thursday even as the dollar weakened slightly in intraday trade.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery fell 0.49 to trade at $1,228.50 a troy ounce.

Overnight, gold rose to the highest levels of the session on Wednesday, after data showed that retail sales in the U.S. fell more than expected in December, dampening optimism over the strength of the economic recovery.

The U.S. Commerce Department said that retail sales declined by a seasonally adjusted 0.9% last month, worse than expectations for a drop of 0.1%.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.

Core retail sales, which exclude automobile sales, slumped by a seasonally adjusted 1.0% in December, disappointing forecasts for a 0.1% increase.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.

The disappointing data dampened optimism over the strength of the economy and reduced expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

Also on the Comex, silver futures for March delivery slumped 1.14% to $16.795 a troy ounce.

Elsewhere in metals trading, copper for March delivery fell by 0.25% to $2.521 a pound, a further drop after a recent bearish downturn across the commodity complex on prospects for global economic growth.

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