Gold futures climbed by more than 1% Friday as a drop in new U.S. home sales in July fed market expectations that the U.S. Federal Reserve may decide to delay a slowdown in its monetary stimulus.
Gold for December delivery jumped $24, or 1.8%, to $1,394.80 U.S. an ounce on the Comex division of the New York Mercantile Exchange. Prices haven’t closed above $1,390 U.S. since mid-June. On Thursday, they saw a modest 70-cent advance.
The gains following the home-sales data turned what was going to be a flat weekly performance for gold into a potential gain of around 1.8% for the week.
September silver also surged 66 cents, or 2.9%, to $23.70 U.S. an ounce, poised for a gain of around 1.6% for the week.
Sales of new U.S. homes dropped 13.4% to a seasonally adjusted annual rate of 394,000 in July, the lowest rate since October, according to government data released Friday. Economists had expected sales to pull back in July to a rate of 485,000.
The data come as key policy makers and economists meet in Jackson Hole, Wyoming, to talk about Fed policy and leadership.
The Federal Reserve is on track to pull back from its $85-billion-U.S.-a-month asset purchase program by the end of the year, said John Williams, the president of the San Francisco Fed Bank on Friday. But in an interview on CNBC, Williams declined to speculate at which meeting the first move would come.
The asset purchase program has helped support the metal as quantitative easing tends to pressure the dollar and can lead to inflation. Gold is often seen as a hedge against inflation.
Against this backdrop, the U.S. dollar weakened, adding another supportive pillar for dollar-denominated gold prices.
The ICE dollar index, which tracks the U.S. currency against six rivals, fell to around 81.319, from 81.480 late Thursday in North America.
In other metals-futures trading Friday, September copper was up a penny at $3.34 U.S. a pound. It traded down 0.7% week to date.
Among the platinum-group metals, October platinum added $6.10, or 0.4%, to $1,546.20 U.S. an ounce, trading roughly 1.2% higher than a week ago, but September palladium traded down 95 cents, or 0.1%, at $754.10 U.S. an ounce, set to lose over 1% for the week.
