Price of Gold Slumps Most in Six Weeks as U.S. Home Sales Jump

San Francisco (Apr 22)  Gold futures fell the most in six weeks as signs of a recovery in the U.S. economy curbed demand for the precious metal as an alternative asset.

Sales of previously owned homes jumped in March to the highest since September 2013, figures from the National Association of Realtors showed Wednesday. The dollar pared losses against a basket of 10 currencies, while gold dropped to a one-week low. The metal fell 2.5 percent in March as the greenback climbed for the ninth straight month.

“The housing data was very positive, and the chatter about a rate hike in June or September is getting louder” for U.S. borrowing costs, Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview.

Gold futures for June delivery fell 1.4 percent to $1,186.70 an ounce at 11:06 a.m. on the Comex in New York. A close at that price would mark the biggest drop for a most-active contract since March 6. Earlier, the metal touched $1,185, the lowest since April 14.

U.S. monetary policy will remain accommodative once the central bank lifts interest rates, likely in 2015, New York Federal Reserve President William C. Dudley said in a speech Monday at the Bloomberg Americas Monetary Summit.

Silver futures for May delivery slumped 1.6 percent to $15.74 an ounce. Earlier, the price touched $15.655, the lowest since March 18. Aggregate trading was 71 percent above the 100-day average for this time, according to data compiled by Bloomberg.

Source: Bloomberg