Spot gold went down 0.4 percent at $1,293.26 per ounce at 11:35 a.m. ET (1535 GMT), while U.S. gold futures dropped 0.5 percent to $1,293.30. Spot prices hit $1,300.61 on Friday, but quickly went back below $1,300 an ounce.
Bart Melek, head of commodity strategies at TD Securities in Toronto said that retail sales were better, which means the economy isn’t necessarily slowing as quickly as some have suggested.
U.S. retail sales increased 0.2 in January, startling economists who expected it to remain unchanged. The strong data could depict a less dovish stance from the U.S. Federal Reserve, Melek added.
On Sunday, Fed Chairman Jerome Powell stressed that he would be closely monitoring how a slowing global economy affects local conditions in the United States in order to decide the future of its interest rate trajectory.
Higher interest rates lessen investor interest in non-yielding bullion. This shows that there’s an improved appetite for riskier assets, global stocks regained some ground after its worst week in the year driven by a darkening economic outlook, as China promised further stimulus to cure their ailing economy.
Walter Pehowich, executive vice president of investment services at Dillon Gage Metals in a note said that for the most part, investors are still most interested in the equity markets and are not in a need for any safe haven products at this time.
Speculators trimmed their net long positions in COMEX gold in the week to March 5, as bullion prices dropped from 10-month highs and broke below the key $1,300/ oz level.
However, the net longs are up from record low levels touched in October. Gold still has some impetus left, with concerns over the state of the global economy holding intact, analysts said.
Malek also said that in 2019, one could see some weaker fundamentals in the U.S. as the higher interest rates over the last year start having a negative impact and as we see the fiscal stimulus from the Trump tax-cuts wear off.
Investors will now see a key Brexit vote in the British parliament on Tuesday. Palladium was up 0.6 percent to $1,523.76 per ounce, while silver was down 0.2 percent at $15.28.
Platinum dropped 0.5 percent at $810.91 per ounce, after touching a low since Feb. 19, at $803.50, earlier in the day.
