MW: Copper falls on retail sales data; gold rises slightly
NEW YORK (MarketWatch) -- Copper futures fell Wednesday as weaker-than-expected U.S. retail sales data dampened hopes about a swift economic recovery, while gold rose slightly.
Copper for July delivery fell 6.1 cents, or 2.9%, to $2.025 a pound on the Comex division of the New York Mercantile Exchange. June gold rose $1.90 or 0.2%, to $925.80 an ounce. The gold contract had ended Tuesday's trading at the highest level since April 1.
U.S. retail sales dropped a seasonally adjusted 0.4% in April, the eighth decline in the past 10 months, the Commerce Department estimated Wednesday. Markets on average had expected a slight increase.
The Commerce Department's retail sales data measure revenues at stores selling durable and nondurable goods. Consumer spending accounts for about 70% of the U.S. economy and is a key element in economic growth.
Retail sales had dropped 1.3% in March.
Also helping copper move lower, China's industrial production grew less than expected in April, according to data released Wednesday by the National Bureau of Statistics.
April production in China, the world's biggest copper consumer, rose 7.3% from a year earlier, easing from an 8.3% expansion in March. Analysts had expected a rise of 8% in April, according to the median forecast of analysts polled by Dow Jones Newswires.
Gold fund flows stall
GLD 91.24, +0.54, +0.60%
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In gold trading Wednesday, prices swung between gains and losses, with a stronger dollar adding downward pressure on the metal while the disappointing retail sales data raising gold's safe-haven appeal.
Investment in gold exchange-traded funds stalled recently. Holdings in the SPDR Gold Trust (GLD 91.24, +0.54, +0.60%) , the biggest ETF backed by gold, stood at 1,104.09 tons Tuesday, remaining unchanged for a fifth straight day, according to the fund's latest data.
"To date, we have assumed that the price of gold will see a short-term correction, due to weak demand from the jewelry industry and stagnating investment demand," said analysts led by Barbara Lambrecht at Commerzbank, in a note.
However, "should the U.S. dollar weaken further, this correction may not occur," they added.
The dollar rebounded from their recent losses Wednesday, with the dollar index (DXY 82.42, +0.11, +0.13%) up 0.6% to $82.548. A stronger dollar tends to reduce gold's appeal as an investment alternative.
In other metals Friday, July silver sank 11 cents, or 0.8%, to $14.105 an ounce. June palladium lost $1.85, or 0.8%, to $232.60 an ounce, and the July contract for platinum declined $9.20, or 0.8%, to $1,122.90 an ounce.
