Gold Sinks After Housing, Income Reports (Update 1)

Updated from 10:02 a.m. EDT with settlement prices

NEW YORK (TheStreet) -- Gold prices sank Tuesday after housing prices and personal income came in better than expected.

Gold for December delivery fell $9.40 to $1614.60 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1631.60 and as low as $1614.50 an ounce, while the spot price was down $8.20.

"Since that [personal income] plus the housing market came in a little bit better, prospect of Federal Reserve easing is a little bit lower," said Phil Streible, senior commodities broker at RJO Futures.

Silver prices for September delivery settled down 12 cents to $27.91 an ounce, while the U.S. dollar index was sinking 0.22% to $82.65.

Gold rose about 2.5% last week amid speculation that Fed sentiment increased for quantitative easing efforts and after European Central Bank President Mario Draghi pledged to do whatever it takes to keep the single-currency bloc intact. Gold rose slightly on Monday as traders engaged in light buying ahead of the two-day Fed meeting that began Tuesday and will conclude Wednesday with an announcement of forthcoming monetary policy.

Streible said he thinks that ahead of the Fed announcement traders will either lighten up their positions or take profits off the bump gold prices received in the past few days.

Gold mining stocks were mostly lower Tuesday. Eldorado Gold (EGO) was off the most at $10.92, down 43 cents, or 3.8%, while Randgold Resources (ABX) was at $89.75, down $2.15, or 2.3%.

Among other mining stocks, Newmont Mining (NEM), AngloGold Ashanti (AU) and Yamana Gold (AUY) were down 1%, 1.4% and 1.4%, respectively.

-- Written by Joe Deaux in New York.

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