Gold Price Pushes $1400 as US Home Sales Disappoints

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The Bullion Bank: Gold Price Surges on Technical Breakout

Gold Chart

With weak market data worries about Fed easing have subsided and sentiment for gold has reversed course, at least for now.

Gold worked its way back up to the $1400 an ounce barrier to cap off the second strong week in a row for the commodity (1). Dollar weakness and disappointing housing data contributed to the rise of prices in the precious metals sector.

The recent July housing report showed a 13.4% decrease in new home sales, which is the lowest level since last October (2). With the release of the July numbers, came an 8% downward revision in June home sales. 10 year Treasury yields fell along with dollar as market participants began to doubt the Fed would stop asset purchases with weak numbers from the new home sales report.

Speculation that QE will continue is seen as bearish for the dollar and bullish for the precious metals sector. TheBullionBank.com charts showed gold jumped more than $30 per ounce during the first few hours of trading on Friday to $1396 per ounce, eventually reaching $1400, a level not seen for the last two months. Silver broke the $24 barrier, after more than a 15% jump at the end of last week. This momentum broke through several trend resistance barriers as well as psychological barriers around the $24 and $1400 levels.

With weak market data worries about Fed easing have subsided and sentiment for gold has reversed course, at least for now.

1. TheBullionBank.com
2. http://www.bloomberg.com/news/2013-08-23/sales-of-new-homes-in-u-s-plunged-more-than-forecast-in-july.html

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