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PRECIOUS-Gold rebounds from 7-week low after U.S. data
February 23, 2015 / 10:55 AM / in 3 years

PRECIOUS-Gold rebounds from 7-week low after U.S. data

* U.S. home resales hit 9-month lows

* Greek bailout extended by four months

* Mainland China shut for Lunar New Year holiday (Updates prices, adds comment)

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON, Feb 23 (Reuters) - Gold steadied in choppy dealings on Monday, bouncing up from a seven-week low as the dollar pared gains after weaker-than-expected U.S. data raised doubts about whether the Federal Reserve might raise interest rates this summer.

Data showed that U.S. home resales dropped to their lowest level in nine months last month at an annualized rate of 4.82 million units.

Spot gold had dropped to its lowest level since Jan. 9 at $1,191.01 an ounce but was flat at $1,201.96 by 2:50 p.m. EST (1950 GMT). The metal has posted four straight weeks of declines, dented by a strong dollar, U.S. rate hike expectations and hopes of a deal between Greece and its lenders.

“The bullish sentiment for gold is just getting sucked out of the market slowly but surely,” said Eli Tesfaye, senior market strategist for RJO Futures in Chicago.

“Technical vulnerability (is) to the downside.”

U.S. gold futures for April delivery settled down $4.10 at $1,200.80 an ounce.

“The market saw some additional selling this morning on the back of the Greek deal news but has managed to find some support,” Saxo Bank senior manager Ole Hansen said.

“$1,220 is really the level we need to move back above to say that we are through the worst.”

Gold fell earlier on Monday after euro zone finance ministers late on Friday agreed to extend heavily indebted Greece’s financial rescue for four months, which lifted the dollar and curbed demand for safe-haven assets.

The metal also lacked support from buyers in No. 2 gold consumer China, where markets have been shut since Wednesday for the Lunar New Year holiday.

Silver rose 0.4 percent to $16.30 an ounce, while platinum rose 0.04 percent to $1,162.50 an ounce, turning up after touching a 5-1/2 year low at $1,150.80 an ounce. Palladium rose 0.8 percent to $783.25 an ounce.

Key events for gold prices this week could be Fed Chair Janet Yellen’s semiannual address to the Senate Banking Committee on Wednesday and a raft of U.S. economic data.

“Janet Yellen’s testimony ... will be picked over for any signs of when interest rates are going to rise... Gold is going to trade on the back of that,” Mitsubishi Corp strategist Jonathan Butler.

Hedge funds and money managers cut their bullish stance in gold futures and options for a third straight week, taking it to a six-week low in the week to Feb. 17, data showed on Friday. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Keith Weir and Meredith Mazzilli)

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