The price of gold fell off in India on Tuesday due to slow down in industrial buying. India’s gold price settled at Rs 16,670 down Rs 280 per ten gram.

Gold prices also fell in the United States due once again to a stronger dollar. The price of gold tanked today closing at $1086.00 per ounce on the New York Mercantile Exchange. The decline of $24.80 was due in part to the release of existing home sales figures for the month of November. Existing homes sales rose beyond analyst expectations giving the dollar index a boost.

Although the median sales price decreased 4.3% from last year, the sale of existing homes in the United States increased 7.4%. This is due in part to the flood of first time home buyers purchasing home before the tax credit was originally set to expire. The higher than expected results from existing home sales adds to the argument that the US economy is on the road to recovery.

Earlier this month, November’s retail sales numbers were higher than analyst had expected. In addition, data from the department of labor showed a better employment outlook when numbers for the  month of November showed a decrease in unemployment in 36 states.  The decrease in unemployment is partly the result of seasonal hiring by temporary agencies.

As we approach the new year gold prices should continue to drop as the dollar gains strength. It is quite possible that gold could make a come back in the first half of January if Christmas retail sales data in the United States doesn’t meet or exceed expectations. In addition, data from existing home sales for the month of December could drop off as first time homebuyers who are interested in taking advantage of the tax credit extention delay purchasing a home during the holiday season. Healthy Financial Habits closing Comex prediction for November 23rd is $1075.65

India’s gold prices should also decrease due to a weakened demand for gold for industrial use. Gold prices in India may suffer Rs 350 per ten gram closing  around Rs 16300

If you are interested in purchasing a home in the new year check out www.subprimeblogger.com for up to date information on FHA Home Loan Rates

Author: Mike Smitt