MW: Gold lower, trading at two-month lows, after housing data
By Claudia Assis and April H. Lee, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold prices reversed and traded lower Tuesday after a gauge of housing prices posted a second straight rise, even if comments that accompanied its release didn't paint a pretty picture of the housing market.
Gold futures for August delivery lost $10.10, or 0.9%, to $1,173.50 an ounce on the New York Mercantile Exchange. A close around these levels would be gold's lowest in two months.
Gold headed south after Standard & Poor's reported a 1.3% rise in prices of single-family homes in major metropolitan areas in the U.S., the second rise for the Case-Shiller index after six declines. A broader look at prices over the past year, however, does not indicate a recovery for the housing market, the index preparers said.
Gold had started the day on the black, supported by a softer U.S. dollar. But it lost steam when floor trading started, as investors shifted to assets considered riskier, such as stocks, and were turning their backs on investments considered safer, like gold and Treasurys.
Meanwhile, the dollar held near a two-month low against the euro, which was changing hands at $1,299. The dollar index (DXY 82.06, -0.02, -0.03%) , which compares the U.S. unit with a basket of six other currencies, recouped some losses and was most recently up a fraction to 82.13.
Holdings at SPDR Gold Trust (GLD 114.50, -1.02, -0.89%) , the world's largest gold-backed exchange-traded fund, fell to 1,301 metric tons on Monday, the latest day for which statistics are available. Holdings have steadily fallen since the fund hit a record 1,320 metric tons in late June.
But not all is doom and gloom for gold, as demand in top consumer India is set to pick up ahead of the busy festival season, starting in late August and extending till November, analyst Pradeep Unni at Richcomm Global in Dubai said in a note to clients.
