April 23 (Bloomberg) -- Gold futures rebounded from a 10- week low as falling U.S. home sales triggered concern that the economy still faces challenges, boosting demand for haven assets.
Sales of new homes dropped to the lowest in eight months, Commerce Department data showed today. Gold has rebounded 6.8 percent this year on concern that U.S. growth was faltering and as tension escalated in Eastern Europe. Ukraine resumed operations to oust militants from eastern cities as the U.S. said 600 troops will be sent for exercises in four countries bordering Russia.
“Gold seems to be getting some bids after the disappointing home-sales data,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Renewed tension in Ukraine is also giving it some support.”
Bullion futures for June delivery rose 0.3 percent to settle at $1,284.60 an ounce at 1:47 p.m. on the Comex in New York, the first gain in four sessions. Prices touched $1,275.80 yesterday, the lowest for a most-active contract since Feb. 11.
“Prices are finding some haven support as investors keep a close watch on the Ukraine-Russia conflict,” Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner, said in a telephone interview. “Physical interest is also picking up as prices fall.”
Holdings in gold-backed exchange-traded products rose 1.8 metric tons yesterday, climbing from the lowest since October 2009, data compiled by Bloomberg show.
Bullion slumped 28 percent last year on concern that the Federal Reserve would slow the pace of stimulus and as equities surged and inflation remained low.
The central bank in March reduced the monthly pace of bond purchases by $10 billion to $55 billion, and signaled additional cuts in “further measured steps.” Gold jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut borrowing costs.
Silver futures for July delivery rose 0.4 percent to $19.467 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for July delivery climbed 0.3 percent to $1,403.90 an ounce.
Talks between the three largest platinum producers and the South African union leading a three-month strike will continue today after the companies increased their pay offer April 17, the companies said.
Palladium futures for June delivery gained 0.3 percent to $786 an ounce.
--With assistance from Glenys Sim in Singapore.