Gold for December delivery at the COMEX division of the New York Mercantile Exchange was surging $24.60 to $1,395.40 an ounce. The gold price traded as high as $1,397.30 and as low as $1,367.80 an ounce, while the spot price was adding $17.74.
Home sales were down 13% putting a shadow on the recovery and the overall economy, Thomas Power, senior commodities broker at RJO Futures, said in a phone call from Chicago.
The Census Bureau reported new home sales in July fell to 394,000 from the prior month's 455,000. Economists polled by Thomson Reuters were expecting a seasonally adjusted annual rate of 490,000 in July.Paired with pent-up physical demand in Asia and backwardation in COMEX gold futures contracts, the yellow metal could close above $1,400 an ounce on Friday for the first time since May 14. "We're within inhaling distance of $1,400," George Gero, precious metals analyst at RBC Capital Markets, said on the phone from New York. When asked if gold would close higher than $1,400 on Friday, Power said "yes," and added that if the precious metal closes above $1,420 on one of the next few trading sessions then the market could see a test for $1,500 -- a level not seen since April, when gold witnessed a historic two-day collapse. Gero, however, was less optimistic: "The question is will the rally continue, because it's Friday and Friday rallies are often met with profit-taking in the afternoon." Silver prices for September delivery were popping 73 cents to $23.78 an ounce, while the U.S. dollar index was sliding 0.21% to $81.31. Gold mining stocks were climbing lockstep with gold prices. Shares of Compania de Minas Buenaventura (BVN), a Peruvian precious metals mining company, were jumping 4.4% to $14.25, while shares of Newmont Mining (NEM) were increasing 4.1% to $33.50. One of the biggest laggards in the sector was Gold Fields (GFI), which was dropping more than 4% for the second day in a row following weaker-than-expected second-quarter earnings and ending its dividend. Gold ETF SPDR Gold Trust (GLD) was up 1.6%, while iShares Gold Trust (IAU) was climbing 1.5%. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV