Gold Has Best-Ever Close

Bullion jumps $16.60 to end at $932.80 an ounce.
Publish date:

Gold prices broke records again Monday on the back of bad news from the housing market.

Benchmark bullion contracts added $16.60 to close at $932.80 an ounce in frenetic action on the Comex division of the New York Mercantile Exchange, marking the highest settlement price ever for the metal.

The exchange-traded funds that hold inventories of the metal were rising also, with the

iShares Comex Gold Trust

(IAU) - Get Report


streetTracks Gold Shares

(GLD) - Get Report

both ahead by about 1.5%.

Gold was already higher during the morning but it received an added boost as the Commerce Department said monthly sales of new homes dropped much more than expected.

Traders interpreted the news to mean that the

Federal Reserve

would cut short-term interest rates by half a percentage point rather than a quarter point in an effort to buoy the economy. That translated into a surge in gold prices, which tend to do well in times of economic uncertainty.

In general, the strong showing in metal prices gave a boost to the miners, with

Yamana Gold

(AUY) - Get Report

ahead by almost 5%, and

Golden Star Resources

(GSS) - Get Report

up 4%.

Shares of the major South African firms were suffering due to concerns about ongoing production problems associated with last week's power outage.

Harmony Gold

(HMY) - Get Report

was off 6%, and

Gold Fields

(GFI) - Get Report

was down 2%.