Sunday / August 18.
HomeCommoditiesGold retreats from 4-month high

Gold retreats from 4-month high

goldindiaGold fell 1 percent on Wednesday, retreating from a four-month high, as a dollar rally and surging U.S. new home sales dented bullion’s safe-haven appeal.

The precious metal accelerated losses after the Commerce Department said that sales of new U.S. single-family homes jumped nearly 10 percent to a 5-1/2-year high in January.

Prior to Wednesday, gold had posted a four-day winning streak with prices up more than 2 percent as disappointing U.S. home prices and consumer confidence fueled concerns over the pace of economic recovery.

“This correction is long overdue. You are seeing improved economic conditions continue to weigh on the market,” said Phillip Streible, senior commodities broker at RJ O’Brien.

Spot gold touched its highest level since October 30 at$1,345.35 an ounce earlier in the day. It was last trading down 1.1 percent at $1,324.80 by 11:46 a.m. EST (1646 GMT), on track for its biggest one-day loss in nearly a month.

U.S. COMEX gold futures for April delivery were down $17.40 to $1,325.40 an ounce, with trading volume on track to finish in line with its 30-day average, preliminary Reuters data showed.

The dollar rose to its highest level in two weeks against a basket of major currencies, while gains in the U.S. equity markets also pressured gold.

Also weighing on prices was news that Hong Kong’s net gold exports to China fell 5.4 percent to 89.745 tonnes in January from 94.847 tonnes in December, reflecting a slowdown in demand from record levels in 2013.

Analysts said, however, the gold market was underpinned by an increase in holdings of bullion-backed exchange-traded funds (ETFs), highlighting renewed investor interest in gold.

SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings rose 0.26 percent to 803.70 tonnes on Tuesday from 801.61 tonnes on Monday.

Among other precious metals, silver fell 3 percent to $21.17 an ounce. Platinum dropped 0.7 percent to $1,422.74 an ounce and palladium was down 0.8 percent at $726.47 an ounce.-Reuters