Strong dollar and strong new home sales data pressure prices
Bullion metal prices ended lower on Wednesday, 24 July 2013 at Comex. Strength in the U.S. dollar and a surge in new U.S. homes sales last month to their highest in more than five years contributed to gold's weakness.
Gold for August delivery ended lower by $15 (1.1%) at $1,319.7 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
September silver ended lower by $0.23 (1.2%) at $20.02 an ounce on Wednesday.
In overnight news, China manufacturing data came in weaker than expected Wednesday. The preliminary HSBC China purchasing managers' index fell to 47.7 in July versus a final reading of 48.2 in June, and is now at an 11-month low. A reading below 50.0 indicates contraction. Asian stock markets were pressured on the data.
The European Union's preliminary Markit purchasing managers' index rose to 50.4 in July from 48.7 in June, which is the first reading above 50.0 in a year and a half and suggests the Euro zone is slowly creeping out of its economic recession. European stock markets rose and the Euro currency rallied against the U.S. dollar on the upbeat economic data. German bond market prices dropped sharply, which suggests better risk appetite among European investors.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.3% on Wednesday.
Among economic data expected at Wall Street today, new home sales increased for a third consecutive month. Sales rose 8.3% in June to 497,000 from a downwardly revised 459,000 (from 476,000) in May. The consensus expected sales to increase to 483,000. The June sales total was the highest since May 2008 when 504,000 new homes were sold.
Separately, the weekly MBA Mortgage Index fell 1.2% to follow last week's decline of 2.6%. This was the sixth negative reading in a row and the tenth decline out of the past eleven weeks.
At the MCX, gold prices for August delivery closed lower by Rs 334 (1.2%) at Rs 27,240 per ten grams. Prices rose to a high of Rs 27,716 per 10 grams and fell to a low of Rs 27,213 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed lower by Rs 508 (1.3%) at Rs 41,346/Kg. Prices opened at Rs 41,854/Kg and fell to a low of Rs 41,281/Kg during the day's trading.
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