By Claudia Assis and Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures staged a comeback Tuesday, reversing to gains shortly after existing-home sales suffered their biggest-ever one-month drop.
Gold for December delivery added $7, or 0.6%, to $1,235.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold hit an intraday low of $1,211.70 earlier and spent most of its first hours of floor trading in the red.
The metal had entered a "shallow correction," but flight-to-quality buyers returned, said Adam Klopfenstein, a senior market strategist with Lind-Waldock in Chicago.
The National Association of Realtors reported that sales of existing homes in the U.S. plummeted 27.2% in July. Sales of single-family homes hit their lowest point in 15 years. Read more about home sales.
That initially sent gold deeper into the red, along with most other asset classes, but investors eschewing risk were quick to resume buying gold.
Fed split on move to bolster economy
As the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10.
On Monday, gold shed 30 cents, or 0.02%, to $1,228.50 an ounce on light trading volume.
U.S. stocks opened sharply lower and fell broadly after the drop in existing-home sales added to concerns about the economy. Read more about action in stocks.
The dollar index (DXY 82.10, -0.13, -0.15%) , which measures the performance of the greenback against a basket of six major currencies, slipped 0.2% to 83.
A weaker dollar is generally supportive of gold and other commodities, as it makes them cheaper to holders of other currencies and broadens their investment appeal.
