Investing.com -- Gold futures fell slightly extending sharp losses from the previous session, as the dollar enjoyed its highest one-day gain in nearly a month amid continuing optimism regarding a deal in longstanding Greek Debt negotiations and a raft of mixed economic data.
On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 6.50 or 0.55% to 1,177.60 a troy ounce. Gold futures wavered between 1,175.80 and 1,187.70, one day after plunging more than $15 an ounce – its largest one-day fall in June. Gold moved off session-highs in European morning trading after peaking above $1,185 an ounce. Gold has now closed lower on four straight sessions and six of the last seven.
On Tuesday morning, the U.S. Commerce Department said in a monthly report that new home sales surged by 2.2% in May to a seasonally-adjusted 546,000 reaching its highest level since February, 2008. The figures underscores resilience in the real estate market, one day after a monthly report indicated that existing home sales jumped more than 5% last month. The Commerce Department also upwardly revised April's total by 27,000 to 534,000, representing a prodigious 8.1% gain. Separately, the Federal Housing Financing Agency's House Price Index ticked up 0.3% in April rising modestly for the second straight month. Meanwhile, the Richmond Fed Manufacturing Index gained five points in June bolstered by a surge in new orders.
Unexpected declines in Durable Goods Orders and a lower-than-expected reading of the PMI Manufacturing Index, however, weighed on the dollar.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, soared to an intraday high of 95.88 experiencing its highest one-day move in more than three weeks, before falling back slightly to 95.57, up 1.11%.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
One day after European leaders expressed hope that a deal for a temporary Greek bailout could be reached later this week, leftist demonstrations in support of the Syriza government continued in Athens. On Monday evening, European Commission president Jean-Claude Juncker said he was confident that the euro group can finalize the decision-making process later this week after Greece took major steps to meet the expectations of its troika of its creditors with its latest proposal submitted on Sunday. The proposal includes raising early retirement age provisions to 67 and imposing higher Value-Added Taxes.
Elsewhere, Federal Reserve Governor Jerome Powell took a hawkish stance on the timing of a highly-anticipated interest rate hike by the Fed, indicating that there is a 50/50 chance lift-off could occur at the FOMC's September meeting, followed potentially by another rate hike in December. Appearing on a panel discussing monetary policy in Washington, Powell said that while transient effects pulled down inflation in the first quarter, it could still reach the Fed's targeted goal of 2% by the end of 2015, as the dollar and oil prices stabilize.
Gold, which is not attached to dividends or interest rates, struggles to compete with high yield bearing assets in periods of rising interest rates.
Silver for July delivery plunged 0.389 or 2.41% to 15.753 an ounce.
Copper for July delivery gained 0.047 or 1.82% to 2.614 a pound.