Gold futures slumped to a 2-week low on Tuesday amid positive economic data on new home sales as well as the consumer confidence level in the U.S.
This marked the first time in two weeks for the precious yellow metal to trade that low.
On the Comex, Gold for June delivery (GCM, +0.09%) fell 1.4% or $17.10 to trade at $1,186.90 an ounce. Since May 11, the metal has not settled that low. Meanwhile, silver for July delivery (SIN5, +0.17) dropped 1.8% or 30.5 cents to settle at $16.746 an ounce.
Chief market analyst at AvaTrade, Naeem Aslam, went on to say that it was pointless trading gold and hoping for an uptrend after the release of the positive U.S. home sales data and consumer levels. Aslam went on to caution investors to always consider the strength of the dollar since it always impacts the price of oil and gold.
In April, new home sales in the U.S rose 6.8% to hit the 517,000 mark while consumer confidence in May rose by 1.1 to 95.4, slightly higher than 94.3 reported in April.
The positive economic data provided strong support for the greenback which significantly contributed to reducing the demand for gold. Usually, demand of commodities whose pricing is in dollars is always directly tied to the currency. Dollar price movements directly influence the level of attractiveness to investors using other currencies.
Elsewhere, platinum for July delivery (PLN5, +0.49) dropped 2.1% or $24.50 to trade at $1,124.10 an ounce while palladium for June delivery (PAM5, +0.74%) fell 0.5% or $3.60 to settle at $780.40. Meanwhile, copper for July delivery dropped 1.2% or 3.3 cents to trade at $2.778 a pound.
MT4 Chart: Gold
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