The spot price of gold continues to flirt with the $1,400 level trading briefly above $1,400 before retreating back below. Gold trading seems to be muted as investors continue to look to the Federal Reserve for any sign/hint to Feds thoughts on the starting point of tapering.
Looking over the gold’s chart for 2013 we find gold for the most part has tracked fairly well on expectations of the Fed’s stimulus program beginning to unwind this year.
On Friday gold bulls push the metal higher by about 2% on the headlines of disappointing New Home Sales Report. New home sales dropped by 13.4% its worst level in more than 3 years. This shifted sentiment once again back into the gold bugs camp as speculation the strength of the housing recovery is stalling and Federal Reserve’s starting point to unwind its $85 billion stimulus.
Add into mix the Fed meeting minutes from July showing that policymakers remain split on the timing to begin the unwinding and cited the economic data continues to be mixed.
Bottom Line: With gold tracking the Federal Reserve’s action so closely in the past – gold future could provide investors hints to Fed action albeit the time horizon is short.