U.S. economic report - Gold prices showed a muted response

The price of gold oscillated between gains and losses on Tuesday as financial markets consolidated following yesterday’s broad-based rally.  The spot gold price held in a narrow range between $1,728 and $1,736 per ounce in overnight trading, while the U.S. Dollar Index stabilized near unchanged at 80.896.

Gold prices showed a muted response this morning to the latest U.S. economic report, which showed that Housing Starts in October rose to a seasonally-adjusted level of 894,000 – well above the 840,000 consensus estimate among economists.

Looking ahead, investors will keep a close eye early this afternoon on Ben Bernanke, who is scheduled to speak at the Economic Club of New York.  There, the Federal Reserve Chairman will deliver a speech enetitled “The Economic Recovery and Economic Policy” at 12:15pm ET.
Jacob Oubina, U.S. economist at RBC Capital Markets, wrote in a note to clients that Bernanke is “obviously going to say the Fed will be as accommodative as possible for the foreseeable future, but he’s not going to provide details on what the extension of (Operation) Twist will look like.”

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