Gold slipped on Tuesday afternoon following better than expected US housing starts data, with the market now looking towards the release of minutes from the last FOMC meeting.
The spot gold price was last at $1,115.5/1,116.0 per ounce, down $1.50 on Monday’s close. Trade has ranged from $1,109.8 to $ 1121.2 so far.
The US housing starts data in July was at an annualised 1.21 million, above consensus of 1.19 million and the highest level in almost eight years. For the year, housing starts are up 10.1 percent from the same period in 2014.
Meanwhile, building permits in July were 1.12 million, below the forecast of 1.23 million.
“Despite the release of slightly weaker-than-anticipated building permits in July, the dollar continues to push higher, exerting downward pressure on metals,” Boris Mikanikrezai, FastMarkets analyst, said.
The mostly better-than-expected data should strengthen expectations of the Federal Reserve lifting US interest rates in September.
“If the bounce in gold is to get a second wind over the next couple of days market expectations of a September Fed rate rise will need to diminish,” Tom Kendall, ICBC Standard Bank analyst, said.
Minutes from the Fed’s July 28-29 meeting will be released on Wednesday, which investors will scrutinize for further signals as to when an interest rate rise will come into effect.
“Any change in language that suggests December is now a more likely date for the Fed to act than September would likely be sufficient to get gold back up to the $1,135 area, particularly if (as expected) the German lower house votes through the latest Greek bailout package and the euro revisits the 1.13 level,” Kendall said.
In the other precious metals, silver was last at $14.81/14.86, down 48 cents. Platinum at $988/993 dropped $7 and palladium at $597/601 was down $15.
(Editing by Martin Hayes)
The post Gold slips after upbeat US housing data, Fed minutes in focus appeared first on The Bullion Desk.
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