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Gold Prices Rally After Weak New Home Sales Data; Silver Prices Also Rally

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Gold prices rallied on Friday and were heading towards clocking weekly gain after a very tepid new-home sales data rekindled speculation that the Silver prices also rallied in trading on Friday.

At last check, gold futures for December delivery climbed 1.78% to $1,395.20 an ounce while spot gold leaped 1.42% to $1,394.71 an ounce. In late trading, the SPDR Gold Trust (ETF) (NYSE: GLD) was 1.49% higher at $134.79.

Silver futures jumped 3.01% to $23.78 an ounce.

The new home sales fell 13.4% to a seasonally adjusted annualized rate of 394,000 in July, way below economists forecast for 490,000.

The U.S. dollar, which traded higher for most part of the day, fell against rival currencies following the data release, making dollar-priced commodities cheaper for holders of other major currencies. The Dollar Index was last down 0.11% to 81.39.

Now, the next U.S. data which will keep bullion investors interested is the August’s non-farm payrolls report, scheduled to be released on first Friday of September.

The Fed’s current round of quantitative easing is explicitly tied to an improvement in the labor market.

In case, the numbers turn out to be insipid then the bank might push back its pullback (QE3) plans. On the other hand, if the labor market shows recovery then bullion could come under pressure.

“If the Fed is going to taper in September, that will be the binary event. It could have quite a big impact on gold,” said Matt Turner, an analyst at Macquarie, according to Reuters.

“The next big event is the non-farm payrolls for September,” added Turner.

 

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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