Gold Adds Volatility After US Home Sales Decline

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.
Gold for December delivery rose as much as 0.8 percent to $1,407 an ounce on the Comex, the highest since June 7 and it fell as much as 0.4 percent, before trading down 0.1 percent at $1,394.20 by 8:16 a.m in New York. Bullion for immediate delivery rose as much as 0.7 percent to $1,407.18 an ounce, also the highest since June 7, before dropping to $1,394.40 in London.

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 on 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.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza