Gold soars past US$1400 an ounce technical barrier to 11-week high

SYDNEY-AUSTRALIA (Aug 25) The price of an ounce of gold has now pushed through the US$1400 an ounce technical barrier in the spot market, as investors reacted to weak U.S. housing data

In the futures market December gold added 1.8% to end at US$1,395.80 an ounce on the Comex division of the New York Mercantile Exchange as investors scrambled toward the perceived safety of gold.

Driving investors back into the yellow metal was housing data out of the U.S., with sales of newly built homes plunging 13% in July according to government data.

The weaker-than-expected data has the potential to impact the Federal Reserves' decision of when to start tapering stimulus, with investors now betting that this latest data will extend the date before the reduction occurs.


Asia's demand for the yellow metal

Providing additional momentum for the gold price is the insatiable appetite out of Asia, with physical bullion buying in the form of jewelry, bars and coins remaining strong.

The World Gold Council estimates that sales will reach as much as 1,000 metric tons this year in both China and India, the world’s largest buyers.