A downbeat U.S. economic report and stock market sell-off prompted safe-haven buying
Bullion prices ended little lower at Comex on Wednesday, 14 January 2015 at Comex after trading higher for most part earlier during the day. A downbeat U.S. economic report and a stock market sell-off prompted safe-haven buying interest in gold. A weaker U.S. dollar index on this day was also friendly for the precious metals bulls.
Gold for February delivery slipped 10 cents to settle at $1,234.50 an ounce.
March silver fell 17 cents, or 1%, to $16.99 an ounce.
U.S. advance retail sales were reported Wednesday morning and came in at down 0.9% in December. That miss to the downside boosted gold prices, U.S. Treasury prices and pressured the U.S. stock indexes. Retail sales were expected to have risen by 0.1% in December. The data also raises the odds that the U.S. Federal Reserve may not raise interest rates as soon as it had hoped.
Another U.S. Federal Reserve official said Tuesday it would be a bad idea for the Fed to raise interest rates in 2015. Minneapolis Fed president Narayana Kocherlakota said a U.S. rate hike would impede the U.S. jobs market recovery.
European stock markets were also under pressure on Wednesday, amid a general risk-off trader and investor mentality, due to world economic growth worries. Late Tuesday the World Bank released its global economic outlook and said overall world growth would be 3% this year, up from 2.6% in 2014. However, the World Bank cut its 2015 forecast, which had earlier called for 3.4% world economic growth.
European stock markets were also pressured by a court ruling that ostensibly approved the quantitative easing move the European Central Bank will likely announce soon. However, selling pressure in European stocks was limited by an upbeat report on Euro zone industrial output released Wednesday.
Crude oil prices traded near steady Wednesday, after falling to a nearly six-year low on Tuesday, at $44.20 a barrel basis February Nymex futures. The downdraft in crude oil has been unsettling to much of the market place, including the stock markets.
The next major data point coming into focus for traders and investors is the 22 January meeting of the European Central Bank. The specter of price deflation and rhetoric coming from ECB officials suggest the central bank will soon initiate monetary stimulus in the forming of quantitative easing.
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