Gold closes at three week highs
Bullion metals ended moderately higher on Monday, 14 April 2014 at Comex. Gold prices on Monday built on last week's gains to score their highest close in three weeks amid investor skittishness following the recent sharp declines in equities in the face of mounting tensions in Ukraine.
Gold for June delivery climbed $8.50, or 0.6%, to settle at $1,327.50 an ounce on the Comex division of the New York Mercantile Exchange.
May silver tacked on 6 cents, or 0.3%, to settle at $20.01 an ounce.
Russia-Ukraine tensions are back on the front burner. During the weekend Ukrainian troops were mobilized to counter a surging pro-Russia movement by protesters who have tried to occupy some Ukraine cities. Ukraine government officials have accused Russia of instigating and even arming the protesters. Meantime, Russian troops are still massed on the Russia-Ukraine border.
In other news Monday, European Central Bank president Mario Draghi said Saturday the recent strength of the Euro currency could prompt fresh easing of ECB monetary policy, in order to keep deflationary pressures on the EU economy in check. This news dropped the Euro and supported the U.S. dollar index.
The featured U.S. economic report of the day was retail sales data for March, which came in better than expected. Retail sales increased 1.1% in March after increasing an upwardly revised 0.7% (from 0.3%) in February. The consensus expected retail sales to increase 1.0%. As expected from the motor vehicle sales data, auto sales contributed significantly to overall sales growth. Sales at motor vehicle and parts dealers increased 3.1% in March after increasing 2.5% in February. Excluding autos, retail sales still increased a solid 0.7% in March, up from a 0.3% gain in February. The consensus expected these sales to increase 0.5%. Sales were strong all around, but there wasn't much to suggest that the acceleration in spending was the result of pent-up demand from delayed winter spending.
The March employment report showed a 0.7% increase in aggregate wages, which exactly matched spending after stripping out autos. Business inventories increased 0.4% for a second consecutive month in February. The consensus expected inventories to increase 0.6%. Total inventories consist of manufacturers, merchant wholesalers, and retailers. Both manufacturers (0.7%) and wholesalers (0.5%) inventories were announced prior to the release. Only retailer inventories, which were flat in February after increasing 0.3% in January, were unknown.
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