Precious metals end higher following weak economic data

Gold and silver gain 1.8% for the week

Bullion metals ended higher at Comex on Friday, 23 August 2013. Gold futures scored gains of nearly 2% for the session as new U.S. home sales in July fed market expectations that the Federal Reserve may decide to delay a slowdown in monetary stimulus, lifting prices to their highest settlement since early June.

December gold touched a session high of $1398.70 per ounce on Friday after trading as low as $1367.80 per ounce earlier in the session. It settled 1.8% higher at $1395.80 per ounce, booking a 1.8% gain for the week.

September silver came off its low of $23.00 per ounce and settled 3.1% higher at $23.74 per ounce on Friday. The rise brought gains for the week to 1.8%.

Recent weeks have entertained much discussion over when the Federal Reserve will begin cutting back the pace of its asset purchases. While comments from many Fed speakers have suggested the first taper may occur as early as September, their remarks have often included reminders that the Fed intends to remain data-dependent. To that end, Friday's new home sales report revealed a notable drop-off in sales, which speaks against tapering in the immediate term.

The asset purchase program has helped support gold as quantitative easing tends to pressure the dollar and can lead to inflation. Gold is often seen as a hedge against inflation.

Among the economic report expected for the day, it was reported on Friday that new home sales collapsed in July, falling 13.4% to 394,000 from a downward revised 455,000 (from 497,000) in June. The consensus pegged new home sales at 485,000. In terms of percentage, the drop in sales was the largest since May 2010 and brought levels down to their lowest point since October 2012.

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