Gold has lost ground in the Monday session. In North American trade, the spot price for an ounce of gold is $1306.68, down 1.03%. In economic news, there are no major releases on the schedule. On Tuesday, the US releases Building Permits and Housing Starts.
Gold prices jumped 4.3% in August, much of which can be attributed to investor jitters over the North Korean crisis. Recent tensions between North Korea and its neighbors had boosted gold, a safe-haven asset. Pyongyang has ratcheted tensions by launching missiles over Japan and testing a hydrogen bomb. However, the crisis has eased in the past week, as investor confidence held firm, despite North Korea firing another missile over Japan. However, the crisis is far from over, and so we could see further volatility from gold. On Sunday, the US ambassador to the United Nations, Nikki Haley, warned that the UN Security Council had exhausted its options, and the US might have to refer the matter to the Pentagon. This was followed by a US-South Korean air drill on Monday.
US consumer spending has been a sore spot in a generally strong economy, and there was more disappointing news on Friday, as August retail sales reports missed expectations. Core Retail Sales slowed to 0.2%, missing the forecast of 0.5%. Retail Sales was even worse, posting a decline of 0.2%, compared to the estimate of +0.1%. Much of the slowdown in the August numbers are attributable to lower automobile sales, which have been slowing in recent months, and was likely made worse by Hurricane Harvey. These numbers underscore continuing weakness in consumer spending, despite a strong labor market. The Federal Reserve remains concerned about weak consumer spending, a key driver of economic growth, and could make reference to the lack of spending in its rate statement, which will be released later this week.