Investing.com – Gold prices traded above breakeven on Wednesday, as the dollar faded despite data showing that U.S. existing home sales unexpectedly rose in May while growing expectations for a rate hike later this year limited upside in the precious metal.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose by $2.98 or 0.24%, to $1,246.49 a troy ounce.
The dollar failed to capitalize on upbeat housing data, as the National Association of Realtors said strong demand and inexpensive mortgages were driving up prices at an unsustainable rate, as sales of existing homes rose 1.1% in May to an annual rate of 5.62 million.
Analysts had forecast U.S. existing home sales to decline by 0.5%.
On Tuesday, Boston Fed President Eric Rosengren said low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously while Bill Dudley, head of the New York Federal Reserve, a day earlier, downplayed the recent slowdown in inflation, warning that halting rate increases at this point would be dangerous.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
Weakness in the dollar against a basket of its peers, bolstered commodities across the board.
silver futures lost 0.27% to $16.373, a troy ounce while platinum futures rose by 0.57% to $926.75.
Copper added 1.55% to $2.594, while natural gas, lost 0.93% to $2.880.