Investing.com - Gold prices dipped on Tuesday after upbeat U.S. housing and consumer inflation cemented expectations for the Federal Reserve to chip away at its ultra-loose monetary policies that have supported the precious metal for years.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,296.70 a troy ounce during U.S. trading, down 0.20%, up from a session low of $1,295.00 and off a high of $1,303.30.
The December contract settled down 0.53% at $1,299.30 on Monday.
Futures were likely to find support at $1,293.00 a troy ounce, Friday's low, and resistance at $1,321.80, Thursday's high.
Gold prices edged lower after the U.S. Commerce Department said that the number of building permits issued in July jumped 8.1% to 1.052 million units from June’s total of 973,000. Analysts expected building permits to rise by 2.5% to 1.0 million units in July.
The report also showed that U.S. housing starts soared by 15.7% last month to hit 1.093 million units from June’s total of 945,000, far past expectations for an increase of 8.6% to 969,000 units.
A separate report showed that the U.S. consumer price index rose 0.1% last month from June and 2.0% on year, both figures meeting estimates.
Core consumer prices, which exclude food and energy costs, inched up by 0.1% last month, missing expectations for a 0.2% gain, though the year-on-year rate came in at 1.9%, which met expectations.
On Monday, the National Association of Home Builders/Wells Fargo Housing Market Index increased to 55.0 in August, a seven-month high, from 53.0 in July, beating estimates for a reading of 53.0.
The data fueled market speculation that the Federal Reserve will close its asset-purchasing stimulus program in October and hike interest rates some time in 2015.
Loose monetary policy programs, including three monthly asset purchasing-programs rolled out since the 2008 financial crisis, have supported gold by suppressing interest rates, making the yellow metal an attractive hedge to a weaker greenback.
Meanwhile, silver for September delivery was down 1.03% at $19.432 a troy ounce, while copper futures for September delivery were down 0.67% at $3.088 a pound.