Gold swung between gains and losses after climbing to the highest level since June as investors weighed the outlook for stimulus in the U.S., with a slump in new-home sales boosting the case for sustained debt-buying.
Bullion for immediate delivery rose as much as 0.7 percent to $1,407.18 an ounce, the highest price since June 7, before trading 0.4 percent lower at $1,392.23 at 8:43 a.m. in Singapore. Gold for December delivery rose as much as 0.8 percent to $1,407 an ounce on the Comex in New York, also the highest since June 7.
U.S. new-home sales fell more than 13 percent in July, data showed Aug. 23, sending gold above $1,400 on speculation the Federal Reserve’s $85 billion a month of asset purchases may be sustained for longer. Minutes released Aug. 21 showed policy makers were comfortable with Chairman Ben S. Bernanke’s plan to taper this year if the economy strengthens. Bullion holdings in the SPDR Gold Trust expanded on Aug. 23 by the most in a year.
“QE is still going to be the driving factor until such time as it’s stopped or until they start tapering off,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to quantitative easing by its initials. “It’s going to cause volatility.”
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