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Gold plunges as weak retail and sentiment data spark bear market talk

CommoditiesApr 12, 2013 01:58PM ET
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Investing.com - Gold prices plunged on Friday after reports revealed that U.S. retail sales and consumer sentiment came in much weaker than expected, which sent investors selling equities and chasing the safety of the U.S. dollar.

Gold and the dollar tend to trade inversely from one another.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 4.08% at USD1,501.05 a troy ounce in U.S. trading on Friday, up from a session low of USD1,491.95 and down from a high of USD1,564.15 a troy ounce.

Gold futures were likely to test support USD1,478.55 a troy ounce, July 1, 2011, and resistance at USD1,590.05, Tuesday's high.

In the U.S. earlier, the Thomson Reuters/University of Michigan's preliminary consumer sentiment index dropped to a 9-month low in April, falling to 72.3 from 78.6 in the previous month.

Analysts were expecting the index to tick down to 78.5 this month.

Elsewhere, official data revealed that retail sales in the U.S. fell 0.4% in March, defying expectations for a 0.1% rise after a 1% increase the previous month.

Core retail sales, which are stripped of volatile automobile sales, also dipped 0.4% last month after a 1% increase in February, missing similar expectations for a 0.1% rise.


The Labor Department, meanwhile, reported that the U.S. producer price index fell 0.6% in March, more than an expected 0.2% decline and way off a 0.7% gain the previous month.

The core producer price index rose 0.2% last month, in line with expectations, following a 0.2% increase in February.

The data sent investors ditching equities and snapping up positions in the safe and liquid greenback, which eased off earlier highs.

Gold, however, continued its downward plunge, dropping 20 percent from a 2011 high, as investors sold the commodity on sentiment that after 12 years of steady gains, the yellow metal may be headed for a period of longer-term declines.

Elsewhere on the Comex, silver for May delivery was down 5.14% at USD26.273 a troy ounce, while copper for May delivery was down 2.39% and trading at USD3.351 a pound.







 
Gold plunges as weak retail and sentiment data spark bear market talk
 

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