Gold futures pared much of the early losses but still ended lower for a third straight day on Monday, after some encouraging U.S. retail sales data ignited hopes of economic recovery even as the dollar traded higher against some major currencies. Investors also weighed some mixed data out of China, which showed industrial production to have risen less than expected in April.
Retail sales in the U.S. showed an unexpectedly modest increase in April, a report from the Commerce Department showed Monday. Retail sales inched up 0.1 percent in April following a revised 0.5 percent decrease in March.
Separately, the Commerce Department said U.S. business inventories unexpectedly came in unchanged in March, with a drop in retail inventories offsetting an increase in wholesale inventories.
Meanwhile, China's industrial production rose less than expected in April, while retail sales growth was in line with expectations, but did little to suggest any strength in the recovery underway in the world's second largest economy.
Gold for June delivery, the most actively traded contract, dropped $2.30 or 0.2 percent to close at $1,434.30 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold for June delivery scaled an intraday high of $1,448.30 and a low of $1,424.70 an ounce.
Last week, gold surrendered nearly 2 percent after some upbeat jobless claims data out of the U.S. and the dollar strengthened against a basket of major currencies. Investors opted for the more riskier equity assets supported by the easy monetary policy from central banks, with holdings of the gold-backed exchange-traded fund dropping to a three-year low.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,051.65 tons from 1,054.18 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.22 on Monday, up from 83.10 late Friday in North American trade. The dollar scaled a high of 83.36 intraday and a low of 83.07.
The euro traded higher against the dollar at $1.2975 on Monday, as compared to $1.2974 late Friday in North America. The euro scaled a high of $1.2998 intraday and a low of $1.2944.
In economic news, retail sales in the U.S. unexpectedly showed a modest increase in April, a Commerce Department report showed Monday. Retail sales inched up by 0.1 percent in April following a revised 0.5 percent decrease in March. Economists expected sales to dip by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.
With a drop in retail inventories offsetting an increase in wholesale inventories, the Commerce Department released a report on Monday showing that U.S. business inventories unexpectedly came in unchanged in the month of March.
Business inventories in the U.S. were virtually unchanged for the second consecutive month, while economists had expected inventories to increase by 0.3 percent. Retail inventories fell 0.5 percent in March after rising by 0.2 percent in February, while wholesale inventories rose 0.4 percent after falling by 0.3 percent in the previous month
China's industrial production increased 9.3 percent year-on-year in April, faster than the 8.9 percent rise in the previous month. However, the output growth was below forecast of 9.4 percent growth. In the first four months of the year, production was up 9.4 percent compared to the same period last year.
Retail sales in China increased 12.8 percent annually in April, as expected. This compares with the 12.6 percent rise recorded in March. In the January-April period, sales were up 12.5 percent compared to the same period of 2012.
Urban fixed asset investment in China increased 20.6 percent in the January-April period compared with forecast for 21 percent growth. In the first three months of the year, investment was up 20.9 percent.
China's GDP growth eased to 7.7 percent in the first quarter from the 7.9 percent expansion in the fourth quarter, which ended seven quarters of economic slowdown.
From the eurozone, Germany's exports grew 0.5 percent month-on-month in March, partially offsetting the 1.2 percent drop in February, the Federal Statistical Office said. The monthly rate of expansion were in line with economists' expectations. Imports grew 0.8 percent on a monthly basis, after declining 3.9 percent in the prior month. Nonetheless, the rate was below the consensus forecast of 1.5 percent.
Separately, the agency said German factory sales continued to decline in March, but at a slower pace compared to the previous month. Manufacturing turnover fell 1.8 percent year-on-year on a working day adjusted basis in March, following 3.2 percent decrease in February and a 2.6 percent fall in January.
Meanwhile, the U.K. visible trade deficit decreased slightly in March largely due to an increase in exports, the Office for National Statistics said. The deficit on trade in goods totaled GBP 9.1 billion in March, down from GBP 9.2 billion in February, but slightly above the consensus forecast of GBP 9 billion.
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