Gold Tops $1,400 After Housing Slump Spurs Stimulus Bets

Sales of newly built homes in July plunged more than 13 percent, the most in more than three years, government data showed today. The 394,000 annualized pace compared with a drop to 487,000 forecast by analysts in a Bloomberg survey. Fed policy makers said they are “broadly comfortable” in scaling back debt purchase if the economy strengthens.

“The new home-sales data tells us that all is not well with the economy, and the Fed needs to continue to support growth,” Tom Power, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The housing recovery is an important thing that the Fed will be looking at when it makes its decision on the timing of the tapering.”

Gold for immediate delivery rose 1.5 percent to $1,396.30 at 3:55 p.m. New York time. Earlier, the price reached $1,400.38, the highest since June 7.

On the Comex in New York, gold futures for December delivery reached $1,399.90 after settling at $1,395.80, up 1.8 percent.

Asian Demand

This week, futures advanced 1.8 percent, the third straight gain, partly on signs that demand for jewelry, bars and coins is increasing in Asia. The World Gold Council estimates that sales will reach as much as 1,000 metric tons this year in both China and India, the world’s largest buyers.

Read More: www.bloomberg.com/news/2013-08-23/gold-jumps-to-11-week-high-as-housing-spurs-stimulus-bets.html