Gold prices continue to hold strong above the key psychological level of USD $4,700 per ounce, even as the latest U.S. retail sales data showed consumer spending remains relatively resilient.
According to the latest figures from the U.S. Commerce Department, retail sales rose 0.5% in April following a revised 1.6% increase in March. On an annual basis, retail sales climbed 4.9% compared with April 2025, largely in line with market expectations.
Core retail sales, which exclude vehicle purchases, increased 0.7% during the month after rising 1.9% previously. Meanwhile, the closely watched control group, which feeds directly into GDP calculations, rose 0.5%, outperforming forecasts of 0.4%.
Despite the stronger than expected economic data, gold showed little negative reaction, highlighting continued investor demand for safe haven assets. Spot gold was last trading at around USD $4,705 per ounce, holding critical support levels and remaining firmly within its recent consolidation range.
Analysts note that while retail sales appear healthy on the surface, the figures are not adjusted for inflation. Rising consumer prices are inflating spending totals, masking signs that real consumption growth may be slowing underneath the headline numbers.
With inflation continuing to rise and economic momentum beginning to soften, concerns over stagflation in the United States are growing. Many market participants now believe the Federal Reserve may become increasingly constrained, as slowing economic activity collides with persistent inflation pressures.
This environment could become increasingly supportive for gold. Higher inflation combined with interest rates remaining elevated may push real yields lower, reducing the opportunity cost of holding precious metals and strengthening the longer term bullish outlook for gold.
