Forexpros – Gold prices rose in U.S. trading Friday, as investors snapped up long positions in the precious metal after its traditional hedge, the dollar, fell amid reports the U.S. housing sector may be hitting a soft patch.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded up 1.30% at USD1,663.85 a troy ounce.
Gold futures were likely to test support at USD1627.75 a troy ounce, Thursday’s low, and resistance at USD1,669.85, Monday’s high.
In the U.S., the Commerce Department reported that new single-family home sales fell 1.6% percent to a seasonally adjusted 313,000-unit annual rate in February.
January’s figures were revised down to 318,000 units from a previously 321,000 reading.
The report came days after the National Association of Realtors found that total existing-home sales slipped 0.9% to a seasonally adjusted annual rate of 4.59 million in February.
Housing continues to dampen U.S. economic recovery, and while the Federal Reserve has been clear that sluggish economic conditions that warrant low interest rates will remain through 2014, the monetary authority has been officially mute on the need for extraordinary easing measures to further jolt the economy.
While weak housing can send investors selling stocks and running to the safety of the dollar at times, it can also fuel fears the Fed hasn’t ruled out easing measures such as asset purchases from banks, moves that weaken the dollar and send gold rising.
A stronger euro also sent gold rising on Friday as well, as the two often trade in sync with one another.
Elsewhere on the Comex, silver for May delivery was up 2.80% and trading at USD32.222 a troy ounce, while copper for May delivery was up 1.01% and trading at USD3.804 a pound.
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