Gold rebounded overnight (AEST) on the increased prospect the US Federal Reserve will cut rates later this year following the release of soft US economic data.
While headline US retail sales rose 0.1% month over month in April, control group retail sales – used in calculating personal consumption expenditure in gross domestic product – fell 0.2% month over month.
ANZ notes the expectation was for a 0.3% rise in control group retail sales.
US manufacturing production and the Producer Price Index also came in lower for April, dropping 0.4% and 0.5% month over month respectively.
ANZ Head of FX Research Mahjabeen Zaman says producer prices unexpectedly declined by the most in five years.
“Separate data showed retail sales barely rose. Treasury yields fell and swaps trader increased their bets on further Fed cuts, which supported investor demand,” Zaman says.
This saw gold advance 3.4% overnight to US$3,237 ($5,052) an ounce.
Meanwhile, the S&P/ASX200 rallied 81.6 points, or 0.98%, to 8,379.1 points as of 10.30am (AEST).
Over the past five trading sessions, the index has gained 1.8% and is 2.74% away from its 52-week peak.
Ten of the 11 sectors started the session in the green, with materials leading on a 0.36% rise early in the session and a five-day gain of 1.61%. Utilities lifted 0.33%, industrials was up 0.29% and energy edged up 0.04%.
More sectors were lower than higher. Materials dipped 0.11%, while utilities rose 0.52%, financials shifted up 0.11% and energy lifted 0.05%.
Unsurprisingly, the gold price lift saw the S&P/ASX200 gold miners dominate the top movers. Regis Resources (ASX:RRL) jumped 5.61% to $4.52, Ramelius Resources (ASX:RMS) climbed 4.98% to $2.53, Perseus Mining (ASX:PRU) rallied 4.94% to $3.40, Genesis Minerals (ASX:GMD) advanced 4.76% to $3.86 and Spartan Resources (ASX:SPR) gained 4.75% to $1.99.
Meanwhile, uranium miners Paladin Energy (ASX:PDN) and Deep Yellow (ASX:DYL) retreated 3.12% to $6.21 and 3.01% to $1.29, respectively, in early trade.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & iStock
