Gold Price Awaits Clues On Fed Rate Hike
New York (Aug 25) US home resales fell more than expected in July after four straight months of strong gains, as a lack of inventory limited choice for buyers, but further price rises suggested the housing market remained on solid ground. Existing home sales declined 3.2% to an annual rate of 5.39 million units last month. It blamed the drop in sales on the dearth of properties on the market, which lifted the median house price 5.3% from a year ago. A separate report from the Federal Housing Finance Agency showed house prices rose 1.2% in the second quarter. They were up 5.6% from the second quarter of 2015.
Yellen is scheduled to address a meeting of central bankers in Jackson Hole, Wyoming, on Friday, and recent comments from Fed policymakers have raised investors' expectations that she might adopt a less cautious tone on rates.
Gold may be in a defensive mode for today and tomorrow as there are not many market-moving data points apart from what Yellen is going to say on Friday. Any hawkish comments could turn gold prices bearish next week. Rising US interest rates typically increase the opportunity cost of holding non-yielding bullion and boost the dollar, which makes it more expensive to buy gold for those holding other currencies.
We closed our short-term gold position yesterday at 1325.00 and stay flat now.