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Gold steady as investors eye U.S. retail sales data

By Brijesh Patel
FILE PHOTO: A man arranges gold jewels on a display inside a jewellery shop at Wuse market in Abuja

By Brijesh Patel

(Reuters) - Gold prices held steady on Tuesday as investors awaited U.S. retail sales data that could serve as an indicator of the strength of the world's largest economy amid lingering concerns over global economic slowdown.

Spot gold was up 0.1% at $1,415.19 per ounce, as of 0521 GMT.

U.S. gold futures were up 0.2% at $1,416.60 an ounce.

"Today we are sort of getting neutralised because we are heading into retail sales tonight. Investors are positioning realising there could be a knee-jerk reaction lower again if retail sales numbers come out strong," said Stephen Innes, managing partner, Vanguard Markets.

However, "I don't think it (retail sales data) is going to make a huge difference in overall scheme of things as far as the Fed narrative goes," Innes added.

The U.S. data, due later in the day, is expected to imply that retail sales had edged up 0.1% in June, according to the median estimate of economists polled by Reuters.

Meanwhile, the dollar index was relatively unchanged against a basket of major currencies as the prospect of an interest rate cut by U.S. central bank later this month kept the greenback on the defensive.

Markets have priced in a 25-basis-point cut by the Fed at its meeting at the end of this month.

Gold hit $1,438.63 for the first time in six years last month, supported by expectations of a rate cut by major central banks and concerns about the global economy.

Ahead of the release of U.S. retail sales figures, signs of an improving economic situation in the United States on the back of strong jobs data have led to a steepening of the U.S. yield curve, led by higher longer-dated yields.

"We are relatively neutral on gold at this stage, since we are not seeing much movement in other markets that could potentially impact it, namely, a clear direction for the dollar and U.S. Treasury yields," INTL FCStone analyst Edward Meir said in a note.

On the trade front, U.S. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer would speak with their Chinese counterparts by phone again this week as part of the recently resumed trade talks.

Spot gold remains neutral in a narrow range of $1,404-$1,421 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver dipped 0.2% to $15.35 per ounce and palladium fell 0.3% to $1,562.99.

Platinum edged up 0.2% to $841.21 an ounce, hovering near a two-month high of $846.53 hit in the previous session.

(Reporting by Brijesh Patel in Bengaluru; Editing by Richard Pullin and Sherry Jacob-Phillips)