Gold prices have pushed back above the critical pricing level of £1,589 ($2,000) as new data confirmed a surprising decline in U.S. retail sales.
Just one day after the UK economy was officially classed as being in recession, the first signs of weakness in the American economy gave fresh hope that the Federal Reserve may consider implementing rates cuts sooner rather than later.
The retail sales data, which covered the month of January, revealed a 0.8% decline when compared with December’s figures. This drop was far sharper than economists had expected – while January sales are traditionally lower following the conclusion of the holiday shopping period, analysts had expected just a 0.1% dip. The scale of the decline caught many by surprise and suggests that persistent inflation and persistently high interest rates are weighing heavy on consumers.
January’s 0.8% drop was the largest fall in retail sales in almost 12 months. Factory production also slowed figures show.
Estelle Ou from Bloomberg Economics commented, “Consumers pulled back on spending following the holiday season and amid colder weather — largely as expected. However, even with spending weakness concentrated in interest-rate sensitive categories, January’s pullback was broad-based as consumers tighten their belts amid higher borrowing costs and credit-card delinquencies.”
Gold prices took advantage of the retail decline to move back above the £1,589 ($2,000) marker and are now sitting around £1,593 ($2,005). This price remains one of the best opportunities to acquire gold in months – don’t wait around for prices to continue to push higher. Buy now to capitalise.
