Investing.com - Gold prices declined on Tuesday, after data showed that the number of housing starts issued in the U.S. rose to the highest level since October 2007 last month, supporting the case for higher interest rates.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange dipped $2.10, or 0.19%, to trade at $1,116.30 a troy ounce during U.S. morning hours.
The U.S. Commerce Department said that U.S. housing starts inched up 0.2% to 1.206 million units from June’s total of 1.204 million units. Analysts had expected a figure of 1.190 million.
Meanwhile, the number of building permits issued last month tumbled 16.3% to 1.119 million units from June’s total of 1.337 million. Analysts expected building permits to fall by 8.0% to 1.232 million units in July.
The mostly upbeat data should strengthen expectations of a Federal Reserve interest rate hike as early as next month.
The US dollar index, which tracks the greenback against a basket of six major rivals, was last at 96.95, up 0.1% for the day.
Market players looked ahead to Wednesday’s Federal Reserve minutes for further clarity on its plans to hike short-term interest rates for the first time since 2006.
Elsewhere in metals trading, copper for September delivery on the Comex division of the New York Mercantile Exchange declined 3.2 cents, or 1.39%, to trade at a six-year low of $2.289 a pound during morning hours in New York.
The Shanghai Composite tumbled 6% in volatile trade on Tuesday, with losses accelerating towards the end of the session despite fresh efforts by the government to calm the market.
China’s central bank injected the largest amount of cash into the financial system on a single-day basis in almost 19 months in an effort to offset outflows in the wake of a weaker yuan.
Copper traders are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
Worries that China’s recent devaluation of the yuan will slow down the country’s copper imports also weighed.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.