24-May (MarketWatch) — Gold futures dropped on Tuesday for a fifth straight session, sending prices to their lowest settlement in more than a month.
The precious metal’s decline comes as upbeat U.S. economic data fueled expectations the Federal Reserve will nudge interest rates higher, dulling demand.
June gold dropped $22.30, or 1.7%, to settle at $1,229.20 an ounce. Prices marked the lowest settlement since April 14. Month to date, prices have lost about 4.8%.
New U.S. home sales surged by 16.6% in April to a seasonally adjusted annual rate of 619,000, the Commerce Department said on Tuesday. That was the biggest monthly jump in 24 years.
Gold’s selloff Tuesday is “directly related to the blockbuster new home sales report and what that might portend for a June Fed rate hike,” said Brien Lundin, editor of Gold Newsletter. “Fed presidents seem eager to find sufficiently positive economic data to justify a June hike, and this new input from the residential real-estate market is more supporting evidence for the hawkish case.”
A flurry of Fed speeches this week is expected to do little to knock back the slightly higher odds for a June rate hike that financial markets have priced in, although gold prices would also be vulnerable to any surprise rhetoric from the speakers.