June Advance Monthly Sales Census Boosts Gold Price

On Friday, the US Census Bureau issued release number CB17-112 entitled “ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES, JUNE 2017”.

This release is intended to provide an early estimate of monthly sales by business type for retail and food service companies located in the US and is compiled from answers to a questionnaire mailed to employer firms selected from the larger Monthly Retail Trade Survey.

As illustrated below from page 1 of the report, retail sales were down -0.2% (following an expected +0.2%) after falling by a revised -0.1% in May.

Interestingly, ZeroHedge notes that “core retail sales ex auto/gas posted the lowest annual increase going back to February 2014”.

Analysis suggests that the depressed level of spending in the US makes it difficult to envision official inflation reaching the Federal Reserve’s 2% target and the consequential impact of this release on the gold price was notable. 

Myra Saefong, markets & commodities reporter at MarketWatch.com, noted that “gold prices on Friday marked the highest finish of the month and their first weekly rise since early June, as data on retail sales and inflation stoked concerns that the pace of economic growth may not merit lifting US interest rates again in 2017”.

In fact, August contract gold rose over US$10 to rest at just under US$1,230 signifying the best “single-session climb” since the first week of June and at +1.5%, the first weekly rise in 5 weeks. Interestingly, the breakout in gold was accompanied by a similar breakout in the JPY/USD pair.

Fawad Razaqzada at Forex.com remarked that “the disappointing US retail sales and inflation data has seen the odds of another rate hike fall below 50% this year”, adding further weight to our established observations. 

The July 2017 Advance Monthly Retail report is scheduled for release on August 15, 2017. More interesting however and also coming in August is the NUU Understanding Money Conference. Scheduled for Saturday 26^th August and suitable for all, this conference will exhibit a range of presenters on a number of topics from the definition of money, its past and future, cryptocurrencies and of course gold as the oldest form of money.  Ainslie Bullion will be presenting at the event and we look forward to seeing you there.