Gold prices consolidate lower on strengthening dollar

May 19, 2015 - 4:23 PM GMT

The gold price was consolidating lower in late-morning trading in the US, holding above the psychologically important $1,200 level.

Spot gold was last at $1,207.30/1,208.20 per ounce, a $17.10 loss on Tuesday’s close.

The metal had hit its highest in three months in yesterday’s session at $1,227.60 although it has come under increasing pressure from the dollar, which has gained more than 2.5 percent against the euro over the past two days largely of fears about the growing possibility of beleaguered Greece’s exit from the eurozone.

Also dollar-supportive was strong US housing data – April building permits at 1.14 million were ahead of the forecast 1.06 million and housing starts rose to 1.135 million from 0.93 million in March, beating estimates of 1.02 million.

“US housing data was much stronger than expected in April, bolstering the dollar – this is one of the sectors that we believe will figure highly in the FOMC’s decision on when to raise rates” Tom Moore, an analyst at FastMarkets, said. “Renewed dollar strength will return downside pressure to metal prices, capping the gains made while it corrected recently.”

Silver at $16.96/17.01 per ounce was down seven cents, platinum dropped a sharp $23 to $1,147/1,152 and palladium was at $775/780, a fall of $8.

(Editing by Mark Shaw)