Gold starts week slightly lower, still flirting with USD1,400/oz
NEW YORK (Aug 26) Gold futures started the new week slightly lower following a strong showing last Friday on the back of some concerning U.S. real estate data.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery inched down 0.04% to USD1,395 per troy ounce in early Asian trading Monday. Last Friday, the October contract settled higher by 1.82%.
Gold futures were likely to find support at USD1,351.90 a troy ounce, the low from August 20 and resistance at USD1,417.45, the high from June 7.
Gold prices added 1.5% on the week, the third consecutive weekly advance. The precious metal has rebounded nearly 16% since hitting a 34-month low of USD1,180.15 a troy ounce on June 28.
In U.S. economic news out last Friday, the Commerce Department said new home sales dropped 13.4% last month to an annual rate of 394,000 units. That is the lowest reading in nine months. In July, the median price for a new home sale rose to $257,200, up from $237,400 in the same month of 2012, according to Reuters.
That data point along with a few others out earlier in the week stoked speculation that the Federal Reserve may not immediately move to taper its USD85 billion-per-month bond-buying program. Minutes from the Fed’s July policy meeting published last week showed most members agree with tapering at some point this year.
However, the problem is there appears to be little agreement regarding exactly when the central bank should begin reducing its asset buying. The ensuing uncertainty could put gold and other dollar-denominated commodities in a near-term holding pattern.
Elsewhere, Comex silver for December delivery jumped 1.29% to USD24.087 an ounce while copper for December delivery added 1% to USD3.390 per ounce.