Gold Settles Higher After Weak U.S. Home Sales Data

(RTTNews) - Gold futures snapped a two-day loss to end higher on Friday, as investors sought the safe haven appeal of the metal after some disappointing home sales data out of the U.S. and with the ongoing violence in Ukraine.

For the week, gold gained about 0.4 percent.

The continued violence and widespread protests against President Viktor Yanukovych has culminated in an unconditional peace pact to end the chaos in Kiev and other regions of Ukraine. At least 70 people are believed to have died on Thursday, according to reports citing opposition activists and witnesses. Ukraine gained independence from the Soviet Union, almost 22 years ago. With the frenzied nation almost on the verge of a civil war, President Yanukovych and opposition leaders agreed to a deal which could end the political crisis, with the likely release of former Prime Minister Yulia Tymoshenko from jail.

In economic news, stats revealed by the National Association of Realtors on Friday showed existing home sales in January dropped more than expected, providing further evidence of weakness in the housing market. Home buyers were constrained by tight credit, limited inventory, higher prices and higher mortgage interest rates.

The existing home sales report covers the largest part of the housing market, providing the clearest picture yet about the health of the market. The soft numbers are part of a string of disappointing housing data to have come out lately. Cumulatively, these have pointed to a slowdown in this key part of the economy.

Gold is up about 10 percent in 2014 because it is valued as a safe haven amid signs the global economy has hit a rough patch.

Gold for April delivery, the most actively traded contract, gained $6.70 or 0.5 percent to close at $1,323.60 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for April delivery scaled an intraday high of $1,326.60 and a low of $1,315.90 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 795.61 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.23 on Friday, down from its previous close of 80.29 late Thursday in North American trade. The dollar scaled a high of 80.41 intraday and a low of 80.18.

The euro traded higher against the dollar at $1.3743 on Friday, as compared to its previous close of $1.3719 late Thursday in North America. The euro scaled a high of $1.3757 intraday and a low of $1.3704.

In economic news from the U.S., the National Association of Realtors revealed sales of previously owned homes, known as existing home sales, fell 5.1 percent in January to an annual rate of 4.62 million. Economists expected the rate of sales to come in at 4.65 million. January's figure was also 5.1 percent below the pace seen at the same time of 2013.

Nevertheless, home prices showed strength in January with a 10.7 percent increase, compared to a year ago, as the median existing home price came in at $188,900.

British retail sales declined at the sharpest pace since April 2012 as food store sales weakened notably after Christmas, data from the Office for National Statistics showed on Friday. Retail sales volume, including automotive fuel, fell 1.5 percent month-on-month in January, the first decline in three months and the biggest since April 2012. Economists expected sales to fall 1 percent, after a 2.5 percent rise in December.

Meanwhile, U.K. budget surplus declined unexpectedly in January from the same period of last year, official data revealed Friday. Public sector net borrowing excluding temporary effects of financial interventions was -GBP 4.7 billion in January compared to -GBP 6 billion last year, the Office for National Statistics said. The surplus was expected to rise to GBP 8 billion.