Gold price rises 2% and reaches U$ 1,216.90 this Wednesday

The gold price rose almost 2% on Wednesday and reached 1,216.90, moving above the $ 1,200 level for the first time this month.

The precious metal began its rise in the morning trading session in the United States shortly after the release of negative economic data. The US Department of Labor said import prices fell 0.3% in April, after a 0.2% decline in the previous month. On a year-over-year basis, import prices fell more than 10% after the 10th consecutive monthly decline.

Meanwhile, US retail sales remained stable in April below economists’ 0.2 earnings forecasts.

A reading in department stores for the month showed a sharp drop of 2.2%, while sales of electronics and home appliances fell 0.4%. Since April last year, retail sales have risen just 0.9%, the lowest level since the end of 2009.

The US dollar index, which measures the dollar’s strength against a basket of six major currencies, fell more than 1% to an intraday low of 93.51 – the lowest level since the beginning of February. In comparison, the index rose above 100 in six consecutive sessions in mid-March and reached a high of 100.27 on April 13.

Dollar-denominated commodities such as gold are less expensive for foreign buyers when the dollar depreciates.

In China, industrial production increased 5.9% in April, well below the annual GDP growth rates of 7%. It is a bad sign for the Chinese economy when industrial production falls below global economic growth. China is the world’s largest producer of gold and the second largest consumer of the precious metal.