PRECIOUS-Gold up 1.6 pct, near $1,400, on poor U.S. home sales

Fri Aug 23, 2013 2:50pm EDT

* U.S. home sales tumble 13.4 pct in July to 9-month low
    * Silver jumps 4 percent, above $24 first time since May
    * Fed officials give mixed views on stimulus taper timing
    * Falling U.S. bond yields dent dollar, help gold
    * Coming up: U.S. durable goods Monday

 (Adds comment, updates market activity)
    By Frank Tang and Zhe Sun
    NEW YORK/LONDON, Aug 23 (Reuters) - Gold rose almost 2
percent on Friday, hitting its highest price in more than two
months near $1,400 an ounce, as a big drop in U.S. new home
sales renewed hopes that the Federal Reserve will maintain its
bond-buying economic stimulus.
    For the week, gold gained 1.6 percent for its third
consecutive weekly rise. It has climbed in six out of the past
seven weeks since gold fell to a three-year low at $1,180 an
ounce on June 28.
    Silver outperformed gold to rally nearly 4 percent to
a 3-1/2-month high as the dollar fell and U.S. Treasury bond
yields dropped. It also rose above the $24 mark for the first
time since May 9.  
    Sales of new single-family homes in the United States fell
more than 13 percent in July to their lowest level in nine
months. The Commerce Department data was much weaker than
expected, even during a month when Fed stimulus remained in
place. 
    "The new home sales number is terrible, so the fear is
clearly that higher interest rate (are) going to topple this
housing recovery, which means the Fed has to ease and not
tighten," said Axel Merk, portfolio manager of Merk Funds which
has around $500 million in currency mutual-fund assets. 
    Bullion also drew support when three Fed officials expressed
divergent views on when to reduce the central bank's $85 billion
monthly bond buying. Investors have been trying to predict what
will happen at a Fed policy meeting next month. 
    Spot gold rose 1.6 percent to $1,396.56 an ounce by
2:15 p.m. EDT (1915 GMT), having hit $1,398.20, the highest
price since June 7.
    U.S. Comex gold futures for December delivery settled
up $25 at $1,395.80 an ounce, with Comex trading volume about 20
percent below its 30-day average, preliminary Reuters data
showed.
    Some analysts said that gold's recent rallies in thin
trading suggest gains could fizzle easily, especially with the
Fed's planned stimulus cut and overall improvement in global
economic conditions.
    Silver rose 4 percent to $24.04 an ounce, having hit
a high of $24.08, which marked the highest since May 9.
    
    ASIAN DEMAND SUBDUED
    In mining news, South Africa's National Union of Mineworkers
(NUM) is consulting its membership on a strike in the gold
industry, which could start next week, halting production for
the country's main mineral export. 
    Demand in top buyers India and China has been subdued ahead
of the traditional major gold-buying events in Asia, driven by
India's Hindu festivals and peak wedding season, and as jewelers
start to stockpile ahead of the Chinese New Year.
    Premiums in Hong Kong, the key supplier of gold to China,
have fallen to about $4 an ounce over London spot prices as of
Friday, dealers said, from $5 last week.
    Among platinum group metals, platinum eased 0.3
percent to $1,531.75 an ounce, while palladium dropped
0.8 percent to $745.50 an ounce. 
    
 2:15 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1395.80  25.00   1.8  1367.80 1398.70  143,278
 US Silver SEP  23.738  0.703   3.1   22.885  24.110   65,032
 US Plat OCT   1541.60   1.50   0.1  1536.00 1548.50    8,056
 US Pall SEP    750.85  -4.20  -0.6   748.15  756.85    4,904
                                                               
 Gold          1396.56  21.32   1.6  1369.35 1398.20         
 Silver         24.040  0.930   4.0   22.920  24.080
 Platinum      1531.75  -4.75  -0.3  1538.75 1544.50
 Palladium      745.50  -6.00  -0.8   750.50  754.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        150,629   184,980   189,662     22.38    0.64
 US Silver       85,350    53,800    53,027     31.62   -3.59
 US Platinum      8,194     9,171    12,501     20.56    0.00
 US Palladium     8,136     4,572     5,315                  
                                                               
    

 (Additional reporting by Clara Denina in London and A.
Ananthalakshmi in Singapore; Editing by David Cowell, David
Gregorio and Nick Zieminski)
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