Gold extends losses after upbeat U.S. existing home sales data

Investing.com - Gold prices fell to the lowest levels of the session on Monday, adding to losses after data showed that U.S. existing home sales in May rose to the highest level since November 2009.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange lost $19.30, or 1.61%, to trade at $1,182.60 a troy ounce during U.S. morning hours. Futures were likely to find support at $1,171.90, the low from June 15, and resistance at $1,208.90, the high from May 26.

The National Association of Realtors said that existing home sales increased 5.1% to 5.35 million units last month from 5.09 million in April. Analysts had expected existing home sales to rise 4.4% to 5.26 million units in May.

The upbeat data boosted optimism over the health of the economy and supported the case for a U.S. interest rate hike later this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Gold rallied almost 2% last week after the Federal Reserve's rate statement tempered expectations for a rate hike later this year.

The Fed lowered both its U.S. growth forecast and its interest-rate projections, prompting investors to push back expectations on the timing of an initial rate hike.

Meanwhile, investors nervously eyed last ditch talks in Brussels between European leaders aimed at reaching a deal to unlock bailout finds for Greece in time to avert a default.

The Greek government submitted a new package of economic reforms to its creditors late on Sunday, indicating that it is prepared to make concessions to break a deadlock to unlock bailout funds.

Greece’s existing bailout is set to expire at the end of this month, when it must also repay €1.6 billion to the International Monetary Fund. A default by Greece could trigger the country’s exit from the euro zone.

Also on the Comex, silver futures for July delivery dipped 0.7 cents, or 0.04%, to trade at $16.11 a troy ounce, while copper for July delivery fell 0.4 cents, or 0.16%, to trade at $2.565 a pound.