Gold declines as U.S. housing data beats expectations
Published Jun 27, 2013 01:26PM ET
Investing.com - Gold prices fell on Thursday after housing data beat expectations and rekindled expectations for the Federal Reserve to taper down stimulus measures, which tend to weaken the dollar to kick-start the economy.
Gold and the dollar tend to trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were down 1.28% at USD1,214.05 a troy ounce in U.S. trading on Thursday, up from a session low of USD1,212.35 and down from a high of USD1,244.15 a troy ounce.
Gold futures were likely to find support at USD1,191.00 a troy ounce, the low from August 10, 2010, and resistance at USD1,300.55, Monday's high.
Federal Reserve Chairman Ben Bernanke said last week that monetary stimulus measures may taper this year and possibly end next year if the economy improves.
Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, which makes gold an attractive hedge, though talk of their dismantling sends the dollar rising and gold falling.
The National Association of Realtors said its pending home sales index rose by 6.7% in May, well above expectations for a 1% gain.
Pending home sales rose 12.5% on a year over year basis last month, also above expectations for an 8.3% increase.
Elsewhere in the U.S., jobless claims fell in line with expectations last week, government data revealed.
The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 9,000 to 346,000, in line with expectations for a drop of 10,000 to 345,000.
A separate report showed that U.S. personal spending was up 0.3% in May, in line with expectations.
The dollar traded lower against many currencies on Thursday, still reeling from a downward revision to U.S. first quarter growth on Wednesday.
The Commerce Department revised down first quarter growth to an annualized 1.8% from an initial estimate for 2.4% growth.
Elsewhere, Federal Reserve Bank of New York President William Dudley said earlier the Fed will continue with its asset purchases if the economy fails to gain steam, which weakened the dollar though gold continued its decline anyway.
Elsewhere on the Comex, silver for September delivery was up 0.24% at USD18.658 a troy ounce, while copper for September delivery was up 0.73% and trading at USD3.063 a pound.
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Written By: Investing.com
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