Gold Futures Extend Rally

Standing out among the data was news showing better-than-expected home sales. The National Association of Realtors says sales of existing dwellings reached a 6.28 million annual pace in November, besting consensus forecasts of 6.15 million. In October, preowned homes were sold at a 6.24 million rate.

Some economists have been concerned that home sales would stall and drag on the economy.

New information on consumer confidence, manufacturing and unemployment claims were favorable also. Taken together, the reports paint a picture of a healthy U.S. economy, and that could help buoy the dollar and perhaps stymie a gold rally.

"If the dollar does start to appreciate that would be headwind for gold," says Michael Darda, chief economist at MKM Partners in Greenwich, Conn. "I think the dollar will respond as rate expectations morph" from forecasts of a cut to ones of flat or even increased rates.

Back in gold, the European Central Bank says it sold 41 million euros of gold and receivables in the week ended Dec. 22, or slightly less than 3 tons.

Turning to base metals, Comex copper contracts closed down 1.9 cents at $2.895 a pound.