2013.08.2315:00:00UTC+00Gold Ends At 2-month High On Soft Data, Gains 1.9% For Week

Gold futures recorded sharp gains to settle at a more than two-month high Friday, on some soft new home sales data from the U.S. and with China reporting a better-than-expected manufacturing activity signaling economic recovery in the second largest economy in the world. Gold also found support in a spurt in initial jobless claims for U.S. unemployment benefits reported yesterday. For the week, gold futures gained 1.9 percent for the week.

Nonetheless, concerns remained as to when the Federal Reserve would begin tapering its quantitative easing program, with no clarity from the Fed's policy meet minutes yesterday.

Gold for December delivery, the most actively traded contract, gained $25 or 1.8 percent to close at $1,395.80 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,398.70 and a low of $1,367.80 an ounce.

Yesterday, gold settled flat with uncertain signs the Federal Reserve would begin tapering its quantitative easing program later in the year. However manufacturing data out of China supported prices. China's manufacturing activity expanded in August, raising hopes of increased demand for the precious metal from its second biggest consumer in the world.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 913.52 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.37 on Friday, down from 81.48 late Thursday in North American trade. The dollar scaled a high of 81.66 intraday and a low of 81.22.

The euro traded higher against the dollar at $1.3387 on Friday, as compared to $1.3356 late Thursday in North America. The euro scaled a high of $1.3410 intraday and a low of $1.3334.

In economic news from the U.S., the Commerce Department said new home sales tumbled 13.4 percent to an annual rate of 394,000 in July from the revised June rate of 455,000. Economists had been expecting new home sales to edge down to an annual rate of 487,000 from the 497,000 originally reported for the previous month.

From the eurozone, Germany confirmed its robust recovery during the second quarter, with domestic spending and investment boosting growth to the fastest pace since the start of 2012. The economy expanded as initially estimated by 0.7 percent in the second quarter from the previous three-month period, detailed results from Destatis showed. This was the biggest increase since the first quarter of 2012.

Meanwhile, the U.K. economy expanded at a faster than initially estimated pace in the second quarter due to an upward revision in construction output, data from the Office for National Statistics showed. Gross domestic product grew 0.7 percent in the second quarter from a quarter ago, up from the prior estimate of 0.6 percent.