Investing.com - Gold futures rose on Tuesday on fears the ongoing Iraqi insurgency will escalate, threaten U.S. recovery by dragging Washington deeper into the crisis and weaken the dollar, which trades inversely from the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,321.60 a troy ounce during U.S. trading, up 0.24%, up from a session low of $1,314.60 and off a high of $1,326.60.
The August contract settled up 0.14% at $1,318.40 on Monday.
Futures were likely to find support at $1,310.40 a troy ounce, Monday's low, and resistance at $1,331.40, the high from April 14.
Reports that Syrian warplanes hit targets in western Iraq earlier Tuesday in an effort to join Iran and support the embattled Baghdad government sent gold prices climbing due to safe-haven demand, as fears began to grow the conflict will increase in duration and complexity, especially if Washington gets more involved.
Gold often sees safe-harbor demand among investors worried over geopolitical issues, which eclipsed data seen as bullish for the dollar and bearish for gold.
New home sales rose to a six-year high, surging 18.6% in May to an annual rate of 504,000, according to the U.S. Census Bureau. May's figure was the highest level since May 2008 and the largest monthly increase since January 1992.
Analysts were expecting new home sales to rise 1.6% to 440,000 units.
Elsewhere, the Conference Board reported that its consumer confidence index jumped to 85.2 in June from 82.0 last month. It was the highest reading since January 2008.
Analysts were expecting a reading of 83.5.
Tuesday's data kept market expectations firm for the Federal Reserve to continue winding down its monthly bond-buying program this year and begin hiking interest rates in 2015.
Fed stimulus programs such as monthly bond purchases weaken the dollar by suppressing long-term interest rates, which sends investors to assets like stocks in hopes lower borrowing costs will spur investment and hiring, with gold serving as an attractive hedge to the weaker greenback.
Meanwhile, silver for September delivery was up 0.31% at $21.030 a troy ounce, while Copper futures for September delivery were down 0.03% at $3.141 a pound.