Gold futures fell sharply on Thursday as better-than-expected US retail sales data created the optimism needed for investors to restart bets on an early cut by the US Federal Reserve at its policy meeting September 21 and 22. The strong report was the catalyst that pushed US Treasury yields higher, making the US dollar a more attractive asset, while encouraging weak buyers to liquidate their holdings of dollar denominated gold.

On Thursday, Comex gold futures for December stood at $ 1,756.70, down $ 38.10 or -2.12%.

Retail sales post surprising gain as consumers show strength despite Delta fears

Retail sales posted a surprise gain in August despite fears that escalating COVID cases and supply chain issues were holding back consumers, the Census Bureau reported Thursday.

Sales rose 0.7% for the month against the Dow Jones estimate of a decline of 0.8%. Economists expected consumers to scale back as the delta variant continued its tear across the United States. Persistent supply chain bottlenecks are also expected to dampen spending as products in demand were hard to find, CNBC wrote.

Overall, the numbers reflect a more resilient consumer, with sales up 15.1% from the same period a year ago.

Gold sellers find little respite from sluggish labor market

Gold traders have clearly focused on the strong retail sales report, showing little reaction to a disappointing reading of jobless claims.

Weekly jobless claims rose to 332,000 for the weekend of September 11, according to the Labor Department. The Dow Jones estimate was 320,000.

Initial deposits are up 20,000 from a week ago after posting a new pandemic-era low. Still, the four-week moving average, which represents weekly volatility, fell to 335,750, a drop from 4,250 that took the figure to its lowest level since March 14, 2020, at the start of the pandemic.

Philly Fed delivers more good news on economic recovery

In a separate economic report, the Philadelphia Federal Reserve announced that its manufacturing activity index rose 11 points to 30.7, which is the percentage difference between companies reporting expanding activity and those recording contraction. . That number was well above the Dow Jones estimate of 18.7.

Short term outlook

The attention of gold traders now turns to the Fed meeting on September 21-22. Considering Thursday’s retail sales report and the fact that several Federal Open Market Committees (FOMCs) have already expressed their support for starting the cut this year, gold traders will find it difficult to argue in favor of the cut. favor of a long position in the political meeting.