Gold fell sharply after failing to surpass technical resistance near $1,330 per ounce on optimism that the US economy is improving, thus weakening demand.
Gold was near a three-week high with tension in Ukraine increasing, and they show no signs of lessening anytime soon. Nevertheless, the precious metal has been quite had to keep in any particular direction with traders flipping the gold switch on and off at will.
US President Barack Obama recently had another phone call with Russian President Vladimir Putin about the rising tensions and violent conflicts in Ukraine. The US and Europeans Union look to turn up the heat on economic sanctions that target key political figures, rather than the economy itself. There is speculation that new sanctions will look to target key economic sectors, like energy and financial services, which would have a grave impact on the fragile economy.
The precious metal was higher yesterday on stronger than expected US retail sales. “[Gold has been] pressured by very strong retail sales data from the U.S.,” said Abhishek Chinchalkar, an analyst for AnandRathi Commodities.
The retail sales data out of the US was positive, but economists may be getting ahead of themselves. Data since December has been less than desired, and there has not been the “pent up” of demand expected as data remained on trend.
Today, the US will report consumer price data and the Empire manufacturing data prior to the New York trading session. Economists expect core CPI month-over-month to stay inline at .1 percent and Empire manufacturing data to increase from 5.6 to 8.2.
Gold should see a bit of action tonight with China reporting their quarterly GDP data and industrial production. Analysts predict GDP will fall short (quite a bit) lower than the 7.4 percent expected.
Support for gold on the intraday chart presents itself at $1,310 and $1,300 per ounce.