Source: CBSMarketWatch.com
San Francisco— Gold futures closed lower Monday with traders weighing a rise in existing home sales against an overall uncertain economic picture.
On the New York Mercantile Exchange, gold for December delivery fell $1.90 to close at $362.40 an ounce.
Existing home sales climbed 5 percent in July to a seasonally adjusted annual rate of 6.12 million, the National Association of Realtors said Monday. Average home prices have risen 12.1 percent in the past year to $182,100, the fastest increase since November 1980.
While the figures point toward an economic recovery, pressuring near-term prices for gold, which is used to hedge losses a weak economy, more economic indicators are on tap this week. These include durable goods orders, new home sales and consumer confidence figures on Tuesday.
For now, "the trading backdrop is mixed," said Grady Garrett, chief trading strategist at EnergyTrendAlert.com, a commodity information provider.
On the upside, the Philadelphia Gold and Silver Index is on an "uptrend fed by longer-term inflation expectations in line with the normal economic recovery cycle, and additional uncertainty related to Mid-East violence," Garrett said.
In Bombay, India's financial capital, two bomb blasts killed at least 40 people and injured 150 others, CBS News reported.
"Gold has performed well despite the strong recovery in the U.S. dollar and is being underpinned by strong physical demand on price dips, and fund buying ahead of the anniversary of September 11th," analysts at The Standard Bank in London said Monday. Ongoing tensions in the Middle East have also been supportive, they said.
Still, after a strong week against the euro, the dollar weakened against most foreign currencies Monday. Exchange rates influence trading in gold since the precious metal is denominated in dollars and often used as an alternative form of currency.
A mix of Wall Street news drove the broader stock market indexes lower, but the weakness failed to provide support to the gold market.
Palladium gains
Back on Nymex, palladium prices topped $200 an ounce for the first time since May with traders betting that an economic recovery would prompt higher demand for metal, which is used in electronic applications.
December palladium traded at an intraday high of $201 an ounce, a level the futures market hasn't seen since late May. It closed at $199 an ounce, up $4.15 from the previous session.
October platinum, however, fell by $9.10 to close at $693.20 an ounce
Copper for December delivery rose 0.15 cent to 81.25 cents a pound. The December contract for silver — seen as both a precious metal and an industrial metal — closed at $5.015 an ounce, down 0.4 cent.
On the supply end, gold inventories stood at 2.732 million troy ounces, down 4,786 troy ounces as of late Friday.
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