Gold Soars Towards $900 An Ounce, Friday, May 16, 2008 2:41:16 PM

The price of gold surged higher for the second straight session and moved to its highest level in more than three weeks. June gold closed at $899.90, up $19.90 for the session. The precious metal touched as high as $905.60 in mid-day trading.

Gold closed the volatile week up $14.10 an ounce. The metal added to its gains from Thursday, when it added $13.50 on the session. Prices had dropped to a 12-day low on Wednesday and closed down $3.10 on the day. Bullion plunged by $20.90 on Tuesday. Last week, the metal added $27.80 an ounce after seeing weakness in the previous week.

Stochastics and the RSI continued to indicate neutral status for June gold. The next upward target is $909.30, the high crossing of April 24. The next downward target is $858.70, the low crossing of May 5.

In economic news, housing starts unexpectedly showed a significant increase in the month of April, according to a report released by the Department of Commerce on Friday, with the data likely to offset some of the recent pessimism about the outlook for the housing market. The report showed that housing starts jumped 8.2 percent to an annual rate of 1.032 million units in April from the revised March rate of 954,000 units. Economists had expected starts to edge down to 940,000 units from the 947,000 unit rate originally reported for the previous months.

Traders also considered the release of a report showing that US consumer sentiment dropped to its lowest since 1980. The University of Michigan/Reuters consumer sentiment number came in lower than expected at 59.5, compared 62.6 in April.

Also impacting gold`s hedge value was the rising cost of crude oil, which soared past the $127 mark and again extended its record high.