, IncMarch 24, 2010 - Gold prices rebounded from a three-week low on speculation that the dollar will weaken following the USD existing homes sales report; driving the appeal of the precious metal as an alternative asset.
The report showing sales of previously occupied US homes fell in February for a third straight month drove the appeal of precious metals as an alternative asset. The greenback retraced its gains after climbing as much as 0.5 per cent against all six of the major currencies.
"The dollar looks less attractive after the housing numbers," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "You've got the bargain hunters out to buy gold after the recent slide."
Gold prices for gained 0.4 per cent, to $US1103.70 an ounce on the Comex in New York. Yesterday, the metal broke the $1100 psychological support level, posting a low of $US1092.10, the lowest price since Feb. 25.
Purchases of existing homes dropped 0.6 per cent from January to a 5.02 million annual pace, the lowest rate in eight months. Median prices are also down 1.8 per cent from the previous year.
Rhona O'Connell, the managing director of GFMS Analytics, said today in a report, “Loss of confidence in economic growth -- and economic policies -- is expected to rekindle investor demand for gold as the year wears on; especially if a double-dip recession develops,"
In 2009 marked the ninth straight year of the current Gold bull Cycle. Gold Prices reached an all-time high on Dec. 03 at $1127.50 and closed the year out posting a 24% gain as the dollar fell 4.2%.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
