Investing.com -- Gold futures prices plummeted on Tuesday slipping under $1,200 an ounce, as upbeat U.S. economic data fueled speculation that the Federal Reserve might institute an interest-rate hike by June after all.
On the Comex division of the New York Mercantile Exchange, Gold futures for June delivery plunged more than $14 to $1,188.50 in U.S. morning trading, before settling at $1,186.50, down 1.38%. Gold fell to a session-low of 1,185.00 in U.S. morning trading from a daily-high of 1,204.40, before remaining below $1,190 for the remainder of the session.
Gold has now dropped by more than $10 an ounce in two of the last three trading sessions.
The precious metal likely gained support at $1,169.80, the low on Mar. 19 and resistance at $1,210.60, the high on April 7.
Gold prices dipped on Wednesday after the National Association of Realtors said existing home sales increased 6.1% last month to 5.19 million, its highest level in 18 months. Economists polled by Reuters expected the figure to tick up to increase to 5.03 million.
Separately, the Mortgage Bankers Association said mortgage applications swelled by 5% for the week ending April 17, marking its fourth increases over the last five weeks. A decrease of four basis points in mortgage rate in comparison with the prior week helped boost demand.
The Federal Housing Finance Agency (FHFA) also said Wednesday that its House Price Index (HPI) ticked up 0.7% in February, above a 0.4% increase a month earlier. The index, which covers single-family housing by evaluating data compiled by Fannie Mae and Freddie Mac, increased 5.4% on a year-over-year basis. In its previous monthly report, the FHFA said the index rose 5.1% from its level during the same period last year.
The Fed is taking a data-driven approach, as it contemplates on the timing of its first interest-rate hike since 2009. In recent weeks, worse than expected import/export, industrial production and employment data have lowered expectations of an imminent rate hike when the Federal Open Market Committee meets in June.
When the Fed released the minutes from its Federal Open Market Committee meeting in March on April 8, it reiterated that it will phase in monetary policy changes gradually when it is confident that the economy is strong enough to handle a rate increase.
"When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%," the Fed said in the minutes. "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."
Gold struggles to compete with high yield-bearing assets in periods of rising interest rates. On Mar. 6, gold plunged by more than $30 an ounce when a strong U.S. jobs report for the month of February provided an indication that the Federal Reserve could alter its interest rate environment.
Elsewhere, Silver for May delivery fell 0.221 or 1.38% to 15.787 a troy ounce.
Copper for May delivery fell 0.032 or 1.16% to 2.67 a pound, as traders continued to digest a bond default in the Chinese construction sector earlier in the week.
China accounts for more than 40% of the world's copper consumption.