* Gold turns higher after weak housing data stirs fears
* $1,240 retracement level seen key resistance to rally
* Coming up: US durable goods, new home sales due Weds.
(Recasts, updates prices to market close, adds comments,
changes dateline to LONDON, previous NEW YORK)
By Frank Tang
NEW YORK, Aug 24 (Reuters) - Gold turned higher on Tuesday,
breaking a two-day losing streak after sharply weaker U.S.
housing data whet investor appetite for the metal as a
safe-haven investment.
Gold began to rally following the disappointing existing
home sales data, and as prices found support after dipping
below its 50-day moving average. Bullion could rise to new
highs if it breaks above a major technical resistance at $1,240
an ounce, analysts said.
"Gold demand surged as risk appetite started to fall on the
much weaker-than-expected U.S. home sales data. When risk
aversion rises, we tend to see very strong flow into gold,"
said Nick Brooks, head of research and investment strategy of
London-based ETF Securities.
Sales of previously owned U.S. homes took a record plunge
in July to their slowest pace in 15 years as the wind went out
of the housing sector's sails and underlined a struggling
economy. []
The news sent U.S. stocks down 1 percent, and crude oil 2
percent lower. U.S. Treasuries -- perceived as the safest asset
during economic uncertainty -- rose sharply, sending the
two-year yields to yet another record low. [] [] []
Spot gold <XAU=> was at $1,229.40 an ounce at 3:20 p.m. EDT
(1920 GMT), versus $1,223.40 late in New York on Monday. U.S.
gold futures for December delivery <GCZ0> settled up $4.90 an
ounce at $1,233.40.
Bullion has been on a rising trend on safe-haven demand
amid double-dip recession worries since it bottomed in late
July. Gold rallied to a 1-1/2 month high at $1,237.15 an ounce
last week after a spate of lackluster U.S. data knocked
confidence in the economic recovery.
Technical analysts said gold could rally above its all-time
high at $1,264.90 an ounce set on June 21 if it breaches above
key chart resistance, the 76.4 percent Fibonacci retracement
level near $1,240 an ounce.
(Graphic: http://link.reuters.com/wus86n)
"Once December futures get above $1,240 on a settlement
basis, this market will be in a whole new chart territory where
there is no resistance," said Scott Meyers, senior analyst at
Pioneer Futures Inc.
PHYSICAL DEMAND RISES
Investment demand for gold has increased in recent
sessions, with holdings of the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, rising by
nearly 13 tonnes last week, its biggest one-week climb since
early June. []
ETF Securities' Brook said new funds flowing into ETFS
Physical Swiss Gold Shares <SGOL> totaled $152 million in the
two weeks ended Aug 20, the largest two-week inflow into the
exchange traded product since it started trading in September
2009.
Gold is also entering into a period when physical demand
traditionally plays a bigger role, said VTB Capital analyst
Andrey Kryuchenkov.
Physical gold demand tends to rise in August as jewelers
stockpile inventory ahead of the start of India's festival
season, which starts with Raksha Bandhan on Aug. 24 and extends
until Dhanteras in November, the biggest gold-buying day.
Silver <XAG=> rose by more than 2 percent on pent-up
investment demand. It was last at $18.38 an ounce, versus
$17.93 on Monday.
The platinum group metals also recouped earlier losses,
with platinum <XPT=> last at $1,509.50 an ounce versus
$1,504.50 and palladium <XPD=> at $481.50 against $481.
Prices at 3:11 p.m. EDT (1911 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1233.40 4.90 0.4% 12.5%
US silver <SIU0> 18.378 0.386 0.0% 9.1%
US platinum <PLV0> 1517.70 9.10 0.6% 3.2%
US palladium <PAU0> 484.25 0.55 0.1% 18.4%
Gold <XAU=> 1229.30 5.90 0.5% 12.1%
Silver <XAG=> 18.36 0.43 2.4% 9.0%
Platinum <XPT=> 1515.00 10.50 0.7% 3.4%
Palladium <XPD=> 484.00 3.00 0.6% 19.4%
Gold Fix <XAUFIX=> 1222.00 4.00 0.3% 10.7%
Silver Fix <XAGFIX=> 17.88 -6.00 -0.3% 5.2%
Platinum Fix <XPTFIX=> 1494.00 3.00 0.2% 1.9%
Palladium Fix <XPDFIX=> 476.00 0.00 0.0% 18.4%
(Additional reporting by Amanda Cooper and Jan Harvey in
London)
