Poor US home sales keep gold above $1300

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Gold Steady Above $1,300 After US Poor Home Sales

Bullion.Directory precious metals analysis 28 July, 2014
By Christopher Lemieux
Senior FX and Commodities Analyst at FX Analytics

Data from the National Association of Realtors (NAR) showed that pending home sales fell 1.1 percent on the month, opposed to the forecasted decline of .2 percent.

US equity markets declined sharply on the news, but little action was seen in gold prices.

BNP Paribas economist Yelena Shulyatyeva said, “Unfortunately, I don’t see much of an acceleration in housing demand going forward until we get a significant improvement in the labor market and the income part of it in particular.”

Future prices are about to close the month in negative territory, following a 10 percent increase throughout the first few months of 2014, largely on increasing geopolitical tensions.

Gold is traditional a hedge for all-things-bad, and market participants are largely bullish global economic growth even as growth projections have quickly been declining.

James Shelton, chief investment officer at Kanaly Trust Co., said “as we will see the economy strengthening further, we expect the drop [in gold prices] to accelerate.”

The commitment of traders data, released by the Commodity Futures Trading Commission (CFTC), show that traders will remain predominantly long gold.

Data, as of July 22, show that traders are net-long 136,120 futures and options contracts, while net-shorts fell 19 percent to 21,112 contracts.

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