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