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Gold trims losses after disappointing U.S. pending home sales data

Published 11/25/2013, 10:42 AM
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Investing.com - Gold futures trimmed losses on Monday to move off a four-and-a-half month low hit earlier in the session, after data showed that U.S. pending home sales fell for the second consecutive month in October.

Gold prices were down sharply during Asian hours as the safe-haven appeal of the precious metal was dampened after Iran agreed to limit its nuclear program in exchange for sanctions relief.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,241.05 a troy ounce during U.S. morning trade, down 0.3%.

Comex gold prices fell by as much as 1.4% earlier to hit a session low of USD1,227.45 a troy ounce, the weakest level since July 8.

The February contract settled 0.02% higher on Friday to end at USD1,244.60 a troy ounce.

Gold futures were likely to find support at USD1,214.55 a troy ounce, the low from July 8 and resistance at USD1,250.50, the high from November 21.

Gold prices came off the worse levels of the session after the National Association of Realtors said its pending home sales index declined by a seasonally adjusted 0.6% in October, disappointing expectations for a 1.3% gain.

Pending home sales for September were revised to a 4.6% decline from a previously reported drop of 5.6%.

Year-on-year, pending home sales fell at annualized rate of 2.2% last month, compared to expectations for a 1% decline, after rising 2% in September.

The downbeat data reduced expectations the Federal Reserve will start tapering its bond-buying program as soon as December.

Minutes of the Fed’s October meeting published last week revealed that the central bank could start scaling back its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.

Gold prices tumbled during Asian trading hours as investors reacted to news that Western powers reached a historic deal with Iran over its nuclear program.

Weekend talks among the U.S., Russia, China, Britain, Germany, France and Iran ended in agreement on a "first step deal” that is meant to limit advancements in Iran's nuclear program in exchange for easing economic sanctions against Tehran.

Elsewhere on the Comex, silver for March delivery inched up 0.2% to trade at USD19.94 a troy ounce, while copper for March delivery inched down 0.1% to trade at USD3.216 a pound.

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