MW: Gold falls for second day as U.S. data lift sentiment
Gold futures fell Tuesday for a second straight session, moving below $920 an ounce after unexpectedly strong U.S. housing data lifted sentiment about the economy and stocks, reducing the metal's safe-haven appeal.
U.S. housing starts surged 22% in February, the Commerce Department estimated Tuesday. It was the first increase in eight months. U.S. Treasurys, also seen as a safe haven, fell as well after the housing data.
Gold for April delivery was last down $5.10, or 0.5%, at $916.90 an ounce on the Comex division of the New York Mercantile Exchange.
"Rising equity markets are still seen as diverting some portions of the investment funds previously earmarked for gold," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
On Wall Street, stocks rose slightly higher with the S&P 500 index up 0.4%.
Gold is now about $90 lower than the high above $1,000 hit on Feb. 20, and some observers see it vulnerable to further selling from a technical standpoint.
"Given the failure to clear above $940 last week the metal could look to test toward $890, as further stale long liquidation emerges," wrote James Moore, a precious metals analyst at TheBullionDesk.com.
Losses in gold prices came despite a surge in exchange-trade fund buying.
Holdings in the SPDR Gold Shares the biggest gold ETF, hit a new high of 1,069.05 tons on Monday, up 12.23 tons from the prior day, according to the latest data from the fund.
In foreign-exchange trading, the dollar rose against most of its major rivals, with the dollar index up 0.2%. A higher greenback tends to add downward pressures to dollar-denominated gold prices. See Currencies.
On the economic front, U.S. housing starts unexpectedly surged to a seasonally adjusted annual rate of 583,000 in February, according to the Commerce Department. Construction of new housing units had plunged 38% in the previous three months before February, and economists had forecast a further drop to 456,000 on the month.
In other economic news, inflation at the wholesale level rose in February for the second consecutive month, Labor Department data showed. The producer price index rose 0.1%, driven by a 1.3% gain in energy prices.
In other metals trading, silver for May delivery fell 1.1% to $12.745 an ounce, while April platinum lost 0.3% $1,046.50 an ounce. The June contract for palladium lost 0.3% to $199.70 an ounce. Meanwhile, May copper sank 0.7% to $1.735 a pound.
