Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

'Broken Hearts' Again in Gold as U.S. Retail Sales Trigger Metal’s New Crash

CommoditiesSep 16, 2021 01:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com - It can’t prosper much on soft inflation; neither can it survive an economy rebounding on strong retail sales.

Gold crashed to a five-week low beneath $1,750 an ounce on Thursday after U.S. retail sales jumped more than 15% in the year to August, putting the economy in ebullient light after weeks of challenging data from Covid’s Delta variant.

Gold futures’ most active contract, December, on New York’s Comex settled down $38.10, or 2.1%, at $1,756.70. It earlier sunk to a session bottom of $1,745.50, its lowest since Aug. 12.

“Broken hearts for gold bulls once again,” markets’ commentator Adam Button said in a post on ForexLive. “(It) can't get a lift on soft inflation, (and is) crushed in retail sales.”

The U.S. Consumer Price Index, a key measure of inflation, expanded by 5.3% for the year to August, after a 5.4% growth in July, according to data released earlier in the week.

"Gold has fallen out of favor and fast,” said Craig Erlam, analyst at online trading platform OANDA. “This comes only a couple of days after it broke back above $1,800 on the back of softer U.S. inflation data. That celebration was short-lived and it's suddenly looking rather vulnerable.”

Erlam said from a technical perspective, gold’s $1,780 level marked the neckline of a “head and shoulders” move formed over the last month, peaking at $1,833.

“The fact that this has come ahead of the Fed meeting doesn't bode well for the yellow metal,” Erlam said. “Recent data has given the Fed room to be more patient with tapering but the commentary we had late last week from officials suggested many aren't discouraged. Gold could feel the love once more should policymakers change course next Wednesday but it could be a long week for the yellow metal in the interim.”

Markets are reacting more noisily than usual to U.S. economic data this week, with the Federal Reserve entering its typical blackout period ahead of its Sept. 21-22 policy meeting.

The question of when the Fed ought to taper its stimulus and raise interest rates has been hotly debated in recent months as economic recovery conflicts with a resurgence of the coronavirus’ Delta variant. Chairman Jay Powell is to hold a news conference next week after the Fed’s two-day policy meeting.

The Fed’s stimulus program and other monetary accommodation have been blamed for aggravating price pressures in the United States. The central bank has been buying $120 billion in bonds and other assets since the Covid-19 outbreak of March 2020 to support the economy. It has also been keeping interest rates at virtually zero levels for the past 18 months.

After declining 3.5% in 2020 from business shutdowns owing to Covid-19, the U.S. economy expanded robustly this year, expanding 6.5% in the second quarter, in line with the Fed’s forecast.

The Fed’s problem, however, is inflation, which has been outpacing economic growth.

The central bank’s preferred gauge for inflation - the core Personal Consumption Expenditures Index, which excludes volatile food and energy prices - rose 3.6% in the year through July, its most since 1991. The PCE Index including energy and food rose 4.2% year-on-year.

The Fed’s own target for inflation is 2% per annum.

Sunil Kumar Dixit, chief technical strategist at SK Charting in Kolkata, India, said the performance of the US Dollar Index and United States 10-Year Treasury would be integral for gold’s behavior.

The Dollar Index, which pits the U.S. currency against six major forex rivals led by the euro, was up 0.4% at 92.92 by 1:45 PM ET (17:45 GMT). The yield on the 10-year Treasury note was up 1.8% at 1.33. “A DX above 93 can head higher towards 93.60 & 93.90, triggering an even harder sell off in gold,” said Dixit.

'Broken Hearts' Again in Gold as U.S. Retail Sales Trigger Metal’s New Crash
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (25)
Dave Jones
Dave Jones Sep 17, 2021 5:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
That's a crock alright. And not one of gold!
Whaling Trawler
Whaling Trawler Sep 17, 2021 1:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
buying as much gold as I can. Silver too. Yahoo!!
me ish
me ish Sep 16, 2021 10:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
saw this coming - perfect inverse head and shoulders pattern - absolutely buy the dip and wait for the carnage to unfold over the next week to six months
Jack Drummond
Jack Drummond Sep 16, 2021 4:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
huh?
chrisP bacon
chrisP bacon Sep 16, 2021 3:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
BTFD!!!!
Jack Drummond
Jack Drummond Sep 16, 2021 3:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Really? That's the metaphor that you chose ?? Really ???
Barani Krishnan
Barani Krishnan Sep 16, 2021 3:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Look at the back up quote below from Button. It's just a play on words. You don't get to do this everyday :)
Barani Krishnan
Barani Krishnan Sep 16, 2021 3:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Don't worry Jack. It'll be back above 1800 once the Fed gets done with its silly monthly show :)
Charles Sturrock
Charles Sturrock Sep 16, 2021 2:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I don't believe retails sales increased one bit. I believe people are still buying the same things in the same amounts they have been buying for some time, the difference being is that they are paying a lot more for the same things now. Retail sales are calculated in dollars, and if your dollar is losing buying power due to money printing causing inflation, it takes more dollars to buy the same things in the future. This article is putting lipstick on a pig. Gold is not going down in relation to retail sales. Gold is going down for the reason gold always goes down, and that is the blatant manipulation of paper gold contracts by JP Morgan and crew. The same JP Morgan that got caught manipulating the paper gold market a while back, and merely got a slap on the wrist in the form of a fine. You can bet their profit from these manipulations exceeded the cost of the fine. Bunch of crooks.
Oscar Serafin
Oscar Serafin Sep 16, 2021 2:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold may will going down, but I bet is better buying mining stocks instead of gold di per sé to keep a lower risk.
Barani Krishnan
Barani Krishnan Sep 16, 2021 2:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Charles, the real ********in-lipstick will make its appearance next Wednesday at 2pm.
Invest Right
Invest Right Sep 16, 2021 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No matter your views on crypto, it's a fact that crypto has sucked a lot of capital away from gold. Even if one thinks that crypto is a fad that'll disappear in the event of a true crash, the reality is that for the time being, it continues to attract significant capital that otherwise would have gone into gold.
Stan Smith
Stan Smith Sep 16, 2021 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Crypto has sucked up a lot of capital away from gold"... You're right and not just by coincidence...by design
wendy zeng
wendy zeng Sep 16, 2021 2:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold be nice pls😫😫.. im waiting for 1770😫😫
emad hijazi
emad hijazi Sep 16, 2021 2:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
just hold ... don't worry
Stan Smith
Stan Smith Sep 16, 2021 1:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nice distraction article. The financial farce is about to implode. I'm loading up on gold at these ridiculous low manipulated prices. The big money knows this and are flattening the price so they can buy more
emad hijazi
emad hijazi Sep 16, 2021 1:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
keep an eye on dollar... next week ... the fed meeting
NUNO LOUREIRO
NUNO LOUREIRO Sep 16, 2021 1:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Avoid trading gold, or trade very small lots, this is shameless manipulation
Vijay Kulli
Vijay Kulli Sep 16, 2021 1:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gold rate up
Vijay Kulli
Vijay Kulli Sep 16, 2021 1:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gold rate up sat...now
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 16, 2021 1:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
finally, Taper or No Taper, game is over.What Dr. Jerome Bubble said transitory inflation was the inflation due to 2020 low Covid base. But Dr. Bubble is aware of the stimulus lion 🦁 he is riding on. The real inflation is yet to begin when taper starts. Inflation Lion will get him sooner or later. So Dr. Bubble is more likely to act sooner in September because the lion might let him walk free if he gets off the lion sooner than later. Dr. Bubble and the Lion - will be a story in children's book on how not to do monkey tricks with the US economy
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 16, 2021 1:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
only big lumpy droppings like flushing it all out, will make gold rally. yeah I think we have been waiting for stocks to lumpy chunky droppings
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 16, 2021 1:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold is Waiting for lumpy chunky droppings in stocks. Bigger the lumps, faster the chunks, better for gold rally. also gold selling to buy stocks will press gold down. only when stocks fall faster than rates can rise or actually go down on stock droppings lumpy chunky,
Dave Jones
Dave Jones Sep 16, 2021 1:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
can't survive much on manipulation either...
Heine Pedersen
Heine Pedersen Sep 16, 2021 12:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just disgusting..
Barani Krishnan
Barani Krishnan Sep 16, 2021 12:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Totally, Heine.
Gervais Christopher
Gervais Christopher Sep 16, 2021 11:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I will use all my credit limit to buy Gold and Silver. And then default on my credit cards.
emad hijazi
emad hijazi Sep 16, 2021 11:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I just placed a big position long . long term investment
Edward Chong
Edward Chong Sep 16, 2021 11:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
better keep a cool mind . i am long too but cutting exposure bit by bit. BB are too strong and its too manipulated.
Matt Brackley
Matt Brackley Sep 16, 2021 11:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
everyone should do this
AIM Investor Journal
AIM_IJ Sep 16, 2021 11:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Delta variant and global economic slowdown (shipping crisis, higher taxes, post-lockdown bounce complete) is likely to dampen hopes of reducing record high debt to GDP levels. Tapering uncertainty is driving investors away from market peaks and pushing the USD higher. Central banks try to inflate away much of the value of the debt owed but this is much harder to achieve during periods of economic stagflation when prices are squeezed due to global shortages. Combined with a strengthening currency, these bear all the hallmarks of a bubble forming.
Gervais Christopher
Gervais Christopher Sep 16, 2021 11:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buying more Gold and Silver.
Ashraf Fly
Ashraf Fly Sep 16, 2021 11:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hope it'll be go down 1720 lavel.
Jon Bal
Jon Bal Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
im not getting the retail sales to gold prices connection
Barani Krishnan
Barani Krishnan Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The up 15% print for year-on-year retail sales in Aug was what crushed gold
Barani Krishnan
Barani Krishnan Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It indicates a better economy and strengthens the case for a Fed taper.
Vincenzo Tilotta
Vincenzo Tilotta Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good retail sales = economy is expected to strengthen = investors going for yielding assets (gold is not yielding)
AIM Investor Journal
AIM_IJ Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Barani Krishnan  It was 15% up year on year last month. It was up 53% in April 2021. All paid for by government debt (stimulus checks) that are not sustainable. You can check the figures on (tradingeconomics.com) - United States Retail Sales YoY | 1993-2021 Data | Forecast | Calendar
Barani Krishnan
Barani Krishnan Sep 16, 2021 11:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
AIM Investor Journal  I'm not doubting. Was just explaining to Jon Bai what the trigger for the day was, though we know the smoke and mirrors used by the bears :)
peter neal
peter neal Sep 16, 2021 11:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Interest on the Debt will soon be one trillion a year and stagflation is here to stay with wages leading the way and it's not temperary. Try looking ⏩
AIM Investor Journal
AIM_IJ Sep 16, 2021 11:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Interestingly from 2009-2015 interest remained below $250 billion even though the national debt almost doubled due to public spending skyrocketing and revenue plummeting. The costs of the debt didn't increase as substantially as the debt levels themselves. However the situation now is rather more concerning with interest on the debt currently $380 billion and expected to rise to more than $600 billion per year by 2028 as rates gradually rise.
milena villa escobar
milena villa escobar Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy gold and hold. Now it's just a matter of time. Forget all the noise
Zarul Shafiq
Zarul Shafiq Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How much can buy to hold it ? I wanna see how u can survive on this
Vincenzo Tilotta
Vincenzo Tilotta Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"a matter of time"? Have been waiting for decades for it to touch 2k. The truth is that the Fed is manipulating it down, just before the Fed meeting, gold is so manipulated they will never allow it to reach its true price
Eloy Rodrigo
Eloy Rodrigo Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
their manipulation on Gold has limits, once they cannot have more power it will skyrocket.
milena villa escobar
milena villa escobar Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Zarul Shafiq  very well thank you. I started buying in November 2017. Unlike Bitcoin gold has not had a 20% reversal since this rally started and September of 2018
milena villa escobar
milena villa escobar Sep 16, 2021 11:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Eloy Rodrigo  basil 3 kicks in in 3 months
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email