PRECIOUS-Gold prices rise after U.S. retail sales disappoint

Wed Aug 13, 2014 3:11pm EDT

Related Topics

* U.S. retail sales were unexpectedly flat in July
    * COMEX gold stocks rise to highest since March 2013
    * U.S. Mint to use new silver benchmark for coin sales
    * Coming up: U.S. import, export prices Thursday

 (Updates market activity, adds NEW YORK to dateline, second
byline)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Aug 13 (Reuters) - Gold rose on Wednesday
after soft retail sales pointed to some loss of momentum in the
U.S. economy, reducing fears among bullion investors that the
Federal Reserve may raise interest rates sooner than expected.
    The metal, however, remained in a narrow range, as signs
that tensions in Ukraine and Iraq may be easing helped stock
markets in Europe and the United States. 
    The Commerce Department said retail sales were virtually
unchanged in July, in part because of a second straight month of
declines in receipts at auto dealers. July's reading was the
weakest since January. 
    Analysts said that the yellow metal is likely to remain
rangebound in the near term barring a dramatic change in the
global economic outlook and geopolitical tensions.
    "We saw a move upwards after the retail sales data, which is
now correcting," Commerzbank analyst Daniel Briesemann said. "We
don't see any data coming up, or any other news, which is really
going to shake gold out of its trading band." 
    Spot gold was up 0.3 percent at $1,312.60 an ounce by
2:35 p.m. EDT (1835 GMT).
    U.S. COMEX gold futures for December delivery settled
up $3.90 at $1,314.50, with trading volume about 40 percent
below the 30-day average. 
    The metal has firmly held, however, within this month's $45
trading range.
    Positive U.S. economic data, including second-quarter
economic growth and wage increases, has sparked speculation that
the Fed could raise interest rates sooner than expected, which
could dampen gold's appeal as a hedge.
    Gold exchange-traded funds - popular investment vehicles
that issue securities backed by physical metal - reported
inflows on Tuesday, Reuters data showed, suggesting some
investor appetite for the metal. 
    Demand in major consumer China remained muted. A lack of
robust physical demand could make it hard to sustain rallies and
may also mean there is little support if prices drop.
    As a reflection of weak Asian bullion consumption, gold
stocks held at U.S. exchange warehouses have shot to their
highest since March 2013, keeping a lid on prices.
 
    In precious metals benchmarking news, the U.S. Mint said on
Wednesday it will adopt the new "London Silver Price" benchmark
for its coin sales, silver purchases and price management
programs following the end of the 117-year-old "silver fixing"
mechanism. 
    Among other precious metals, silver was down 0.2
percent at $19.81 an ounce. Platinum eased 0.1 percent to
$1,460.80 an ounce, while palladium gained 0.5 percent to
$877.20 an ounce.

 2:35 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1314.50   3.90   0.3  1306.00 1316.40   92,887
 US Silver SEP  19.845 -0.060  -0.3   19.705  20.085   45,915
 US Plat OCT   1469.90  -2.30  -0.2  1463.50 1477.30    6,247
 US Pall SEP    881.60   3.60   0.4   875.00  882.95    3,529
 Gold          1312.60   4.26   0.3  1304.90 1315.10         
 Silver         19.810 -0.040  -0.2   19.720  20.070
 Platinum      1460.80  -0.90  -0.1  1462.50 1473.00
 Palladium      877.20   4.40   0.5   876.50  880.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         99,352   165,762   157,651     14.67    0.26
 US Silver       60,113    48,268    58,003     18.35    0.49
 US Platinum      6,340     8,584    12,422     12.79    0.98
 US Palladium     4,631     5,443     5,682      18.9   -0.36
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by William Hardy, Pravin Char and David Evans)
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