Feb. 24 (Bloomberg) -- Gold rose to the highest price in more than 16 weeks in New York on speculation weaker U.S. economic data and political turmoil in Ukraine increased haven demand. Silver also reached the highest since October.
Sales of previously owned U.S. homes dropped in January to the lowest level in more than a year, data showed Feb. 21. In Ukraine, lawmakers yesterday gave presidential powers to parliament speaker Oleksandr Turchynov, after ousting Viktor Yanukovych from the role as violence amid anti-government protests killed at least 82 people last week.
After slumping by the most since 1981 last year, gold rose 11 percent since the end of December and is headed for a second monthly gain as signs the U.S. economy wasn’t recovering in line with expectations boosted demand for a haven. Bullion prices rebounded this year even as the Federal Reserve continued slowing stimulus.
“The market is only reacting over U.S. figures,” Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “The political situation has been rather tense, there’s some speculative interest in going into gold as a safe haven.”
Bullion for April delivery climbed 0.7 percent to $1,333 an ounce by 7:37 a.m. on the Comex in New York. It reached $1,337.10 today, the highest since Oct. 31. Futures trading volume was 24 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery increased 0.7 percent to $1,332.90.
Hedge funds and other money managers increased their net- long gold position by 31 percent to a 16-week high of 90,942 contracts in the week to Feb. 18, U.S. Commodity Futures Trading Commission data show. Holdings in gold-backed exchange-traded products rose 3 metric tons to 1,739.2 tons in Feb. 21, data compiled by Bloomberg show. They fell to the lowest level since October 2009 on Feb. 19.
Gold futures’ 14-day relative strength index was at 73.1 today, above the level of 70 that signals to those who study charts that prices may be set to reverse.
“It remains to be seen if recent weakness in U.S. economic data is really due to the weather or if it’s something investors should be more concerned with,” said Sun Yonggang, a Shanghai- based macroeconomic strategist at Everbright Futures Co. “Higher prices also turn off physical buyers, the most sensitive part of demand.”
Silver for delivery in May rose 1.3 percent to $22.09 an ounce, reaching $22.215, the highest since Oct. 31. Palladium for delivery in June added 0.1 percent to $743 an ounce. Platinum for April delivery gained 0.4 percent to $1,433.60 an ounce.