Gold Drops Near Monthly Low As Strong Retail Sales Signal Economic Recovery

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Gold fell to near monthly low after stronger-than-expected retail sales numbers made investors more confident that the U.S. economy is recovering.

Gold futures were trading at $1,754.95 on Tuesday, down -2.22%, after retail sales grew 0.7% instead of an expected -0.7%.

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The move was also influenced by the dollar index rising 0.2%, making gold more expensive in dollar terms for those holding other currencies.

A stronger dollar and higher bond yields made the precious metal less appealing to investors.

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Meanwhile, gold lost some of its earlier gains in Tuesday’s trading, as CPI numbers eased some concerns over inflation (though consumer prices are still up 5.3% from this time last year.) Most investors consider gold to be a great hedge against inflation. 

With the slight downturn, some investors consider it a guying opportunity for the precious metal. Skyrocketing energy prices are likely to bump up consumer and producer prices in the near future causing more inflation worries.

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