PRECIOUS-Gold retreats as upbeat U.S. retail sales strengthen dollar

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(update prices)

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* US retail sales up 1.7% in October

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* Slow grinding for gold now – Analyst

*Palladium hits one-month high

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Nov 16 (Businesshala) – Gold retreated from a more than five-month peak on Tuesday as upbeat US retail sales data for October strengthened the dollar, making the metal more expensive for holders of other currencies.

As of 13:41 ET (1841 GMT), spot gold fell 0.6% to $1,851.80 an ounce, after hitting $1,876.90 earlier, its highest level since June 14.

US gold futures fell 0.7% to end at $1,854.10.

Retail sales in the United States rose faster than expected last month, giving the economy a lift at the start of the fourth quarter and sending the dollar to a 16-month high.

Edward Moya, senior market analyst at brokerage OANDA, said the report suggests consumption can handle higher prices and remains fairly strong, which is positive for risk appetite.

“It was a very strong retailing beat so there are growing risks to the outlook. It will be a slow grind (for gold), but we still need to be clear to move towards $1,900,” Moya said.

Gold has gained more than 2% since last Tuesday following data on an increase in US consumer prices in October.

“The assumption that US inflation is currently peaking, bullion should hold a good bid, as long as the Fed does not deviate from its patient approach to any rate hikes,” said Han Tan, chief market analyst at Axinity.

Richmond Federal Reserve Chairman Thomas Barkin said on Monday that the Fed would not hesitate to raise interest rates, but the central bank should wait to find out if inflation and labor shortages prove to be more prolonged.

Rate hikes impact gold, as they raise bond yields, which increases the metal’s opportunity cost.

Silver fell 0.9% to $24.81 an ounce and platinum fell 2.2% to $1,063.50. Palladium was up 0.5% at $2,163.93, hitting its highest in a month. (Reporting by Bharat Govind Gautam, Arundhati Sarkar and Nakul Iyer in Bengaluru; Editing by Aditya Soni and Vinay Dwivedi)

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