Gold price ignores drop in U.S. retail sales, trades well below $1,800

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(Kitco News) The holiday shopping season did not get off to a positive start as U.S. consumers spent less than expected in November.

U.S. retail sales dropped 0.6% in November, according to the latest data from the U.S. Commerce Department. Economists were expecting to see a fall of 0.2% in last month’s headline number.

Meanwhile, core retail sales fell 0.2% last month, also missing expectations. According to consensus estimates, economists were looking for a 0.2% increase.

The report’s control group, which strips out autos, gas, building materials, and food services, and feeds directly into GPD calculation, fell by 0.2%, missing expectations for a 0.2% gain.

The November decline in retail sales shows that consumer resilience is crumbling and that means that a recession is not that far off, said Capital Economics senior U.S. economist Andrew Hunter.

“Solid gains in previous months mean real consumption growth should still be strong in the fourth quarter as a whole, but we continue to expect the economy to slip into a mild recession in the first half of next year as the Fed’s relentless hawkishness takes its toll,” Hunter said Thursday. “Alongside falling core inflation, that economic weakness should convince the Fed to start cutting rates again by late next year, a lot sooner than officials are currently suggesting.”

Although U.S. consumption is slowing, the gold market is not seeing much of a reaction. Precious metals traders are still digesting Fed Chair Jerome Powell’s comments following the U.S. central bank’s decision to raise rates by 50 basis points while signaling that rates will stay higher for longer. February gold futures last traded at $1,786.20 an ounce, down 1.79% on the day