Gold extends losses after upbeat U.S. housing data

Investing.com - Gold prices extended losses to hit the lowest levels of the session on Tuesday, after data showed that the number of building permits and housing starts issued in the U.S. rose sharply in April, easing concerns over the health of the economy.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery shed $13.00, or 1.06%, to trade at $1,214.60 a troy ounce during U.S. morning hours after hitting an intraday low of $1,212.40.

A day earlier, gold rallied to $1,232.00, the strongest level since February 17, before ending at $1,227.60, up $2.30, or 0.19%.

Prices were likely to find support at $1,210.60, the low from May 15, and resistance at $1,236.70, the high from February 17.

Also on the Comex, silver futures for July delivery dropped 30.0 cents, or 1.69%, to trade at $17.43 a troy ounce. On Monday, silver jumped to $17.77, a level not seen since February 3, before closing at $17.73, up 16.9 cents, or 0.96%.

The U.S. Commerce Department said that the number of building permits issued in April increased by 10.1% to 1.143 million units. Analysts expected building permits to rise by 2.2% to 1.060 million units in March.

The report also showed that U.S. housing starts soared by 20.2% in April to hit 1.135 million units from March’s total of 944,000 units, easily surpassing expectations for an increase of 9.9% to 1.019 million.

The upbeat data added to signs of a recovery in the housing market and bolstered the outlook for the broader economic recovery.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 1.15% to hit 95.31.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere in metals trading, copper for July delivery slumped 4.2 cents, or 1.45%, to trade at $2.865 a pound, as investors fretted over the health of China's economy.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Meanwhile, fears over a Greek debt default continued to dominate market sentiment even after the country’s labor minister said Tuesday that an agreement with its lenders would soon be reached.

Athens is scrambling to reach a cash-for-reform deal with its international lenders in time to avoid a cash crunch.