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USAGOLD/Peter Grant/05-12-17
Gold started the session modestly higher and got a bit of a boost after soft U.S. data weighed on rate hike expectations and the dollar. Tuesday’s high at 1228.59 has been negated, shifting focus to the high for the week at 1236.51.
U.S. CPI cooled to +2.2% y/y in April, versus 2.4% y/y in March. Core CPI dipped to +1.9% y/y, from 2.0% in March.
U.S. retail sales rose 0.4% in April, below expectations of +0.6%. Ex-autos came in at +0.3%, versus expectations of +0.4%.
Expectations of a 25 bps rate hike at the June FOMC meeting have edged back below 80%. In light of today’s data, further limited tempering is likely.
The continued unevenness of U.S. economic data, the current political uncertainty, along with heightened geopolitical risks should continue to offer support to gold. If any of these situations deteriorate further, safe haven demand is likely to pick-up.
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