TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - Gold continued trading sideways on Wednesday, adding $3.80 or 0.29 percent to trade at $1,312.60 an ounce, while holding onto gains of nearly 9 percent so far this year. Silver eased $0.05 or 0.25 percent to trade at $19.86 an ounce, after the dollar plunged into negative territory when weaker than expected retail sales pointed to a slowdown in the U.S. economy.
"We saw a move upwards after the retail sales data, which is now correcting," said Commerzbank's Daniel Briesemann. U.S. retail sales in July were reported unchanged on Wednesday, far below the 0.3 percent analysts were expecting, after the 0.2 percent gain in June. The miss sparked a modest rally in the Gold market that held until the close of futures trading. The miss also put pressure on the dollar while at the same time curbed speculation that the Fed may raise interest rates sooner than expected.
"The weaker dollar helped Gold to move up a little bit, but it's still in a narrow trading range," said Briesemann. Gold prices are trading in a $25 an ounce range between $1,300 and $1,325, says MKS (Switzerland). "The Fed is focused on justifying its easy monetary policy. This gives them more ammunition that things are not as strong as some economists say," said Craig Dismuke, of Vining Sparks.
Meanwhile, some believe Japan's worst economic contraction since the tsunami in 2011, may also be bolstering the yellow metal after Shinzo Abe's boost in the national sales tax caused consumer spending to plunge in the second quarter. The annualized 6.8 percent fall in gross domestic product (GDP) reported in governmental preliminary estimates on Wednesday, was far worse than experts predicted in April when the tax first took effect.
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