July 24 (Bloomberg) -- Gold futures fell the most in two weeks as sales of new U.S. homes in June rose to a five-year high, adding to signs of economic gains that may prompt the Federal Reserve to scale back monetary stimulus.
Purchases climbed 8.3 percent to an annualized pace of 497,000 homes, the highest since May 2008, the Commerce Department said today. The dollar rose as much as 0.6 percent against a basket of 10 currencies. Gold has slumped 21 percent this year, while the greenback climbed 4.5 percent.
“Strong housing data made the gold market nervous,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The dollar is keeping gold under pressure.”
Gold futures for December delivery fell 1.1 percent to settle at $1,320.30 an ounce at 1:49 p.m. on the Comex in New York, the biggest drop for a most-active contract since July 5. Earlier, the price rose as much as 0.9 percent.
This year, the plunge in gold has erased $58.3 billion from the value of exchange-traded product backed by the metal. Some investors lost faith in the commodity as a store of value amid an equity rally, low inflation and speculation that the Fed will reduce bond purchases.
“Every new data becomes a point of speculation for the timing of the stimulus tapering,” David Lee, a vice president at Heraeus Precious Metals Management in New York, said in a telephone interview. “The market wants clarity from the Fed.”
Silver futures for September delivery fell 1.2 percent to $20.02 an ounce on the Comex. This year, the price has tumbled 34 percent, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.8 percent to $1,455.20 an ounce. Earlier, the price reached $1,465.60, the highest since June 13.
Palladium futures for September delivery rose 0.8 percent to $745.30 an ounce.
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