Gold Futures Rise in New York as Dollar Retreats; Silver Gains

July 27 (Bloomberg) -- Gold futures climbed in New York as the dollar retreated, supporting demand for the precious metal as an alternative investment. Silver also gained.

The dollar dropped to a seven-week low against a basket of six major currencies. Gold gained 4.8 percent in the previous two weeks as the greenback dropped 1.8 percent. Purchases of new homes in the U.S. jumped 11 percent in June, the biggest gain in eight years, government data showed today.

A “positive economic outlook” and the sliding dollar are “slightly bullish” for gold, Societe Generale analysts in London said in a note.

Gold futures for August delivery gained 40 cents to $956.30 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $962.70, the highest for a most-active contract since June 11.

Gold for immediately delivery climbed $3.17, or 0.3 percent, to $954.52 at 3:04 p.m. New York time.

Silver futures for September delivery gained 11.5 cents, or 0.8 percent, to $13.990 an ounce.

Gold and the dollar have moved inversely every month since April, resuming a pattern in five of the past seven years.

“Gold’s continued consolidation above $947 suggests further upside momentum,” said Ralph Preston, a Heritage West Futures Inc. commodity analyst in San Diego.

Earlier, gold futures dropped as much as 0.6 percent. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, are down more than 3 percent this month, signaling investors may be shifting to other assets.

Silver futures have climbed 24 percent this year, and gold is up 8.1 percent.