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Updated from 12:47 p.m. EDT

Gold and metals finished lower Tuesday, as crude oil prices reversed early gains and the dollar erased some of its earlier losses.

Early on, news that U.S. existing home sales declined in May fueled hope that the

Federal Reserve

will sound less hawkish when it announces its decision on interest rates Thursday. However, the housing data also reinforced concerns about the outlook for growth and demand for commodities, pressuring shares on Wall Street and, ultimately, metals themselves.

Gold for June delivery dropped $3.30, or 0.6%, to close at $584.40.The precious metal earlier reached a high of $599 before falling back.

Among other metals, silver for July delivery also reversed early gains, losing 4 cents, or 0.4%, to close at $10.29 an ounce.

Copper for July delivery, meanwhile, dropped 14.7 cents, or4.6%, to $3.08 a pound. The decline followed a report by theInternational Copper Study Group that showed copper production toppedconsumption by 64,000 tons in the first quarter.

Gold, which acts as a hedge against inflation pressures, openedhigher as crude oil prices again topped $72 a barrel. Crude forAugust delivery rose in morning trade amid expectations of a drop in gasoline supplies and refinery problems on the Gulf Coast.

But crude edged lower before the close of metals trading, and was recently down 5 cents $71.75 a barrel

Metals had also received an early bid as the dollar weakened ahead of the expected drop in existing home sales. A lower dollar boosts the price of dollar-denominated commodities, such as gold, as it takes less of the currency to buy the same amount of gold.

But the Dollar Index, which tracks the greenback against a basket of key currencies, pared earlier losses and was recently trading down just 0.01%.

Existing home sales dropped 1.2% to 6.67 million units in May,according to the National Association of Realtors. Wall Streeteconomists had forecast sales to drop to 6.62 million. April sales wererevised downward to 6.75 million units from 6.76 million.

Metals and commodities have suffered a meltdown over the past month, as concerns that rising rates, especially in the U.S., might derail global growth.

Tuesday's housing data "gave a nice prelude for hopes that the Fedwill only raise rates by

a quarter point," says TomHartmann, a metals analyst and broker at Altavest.

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The market is fully expecting a 25-basis point hike on Thursday, and is pricing in an 86% chance of another such hike in August, according to



Yet, concerns that the Fed will hike rates too much kept a cautious tone in commodities trading.

"If the market thinks they'll raise rates through September, it'sgoing to revive fears that they could bring the housing market down with a bang, given the Fed's propensity to tighten too much."

Meanwhile, shares of metal-mining companies were lower, trackinga selling trend for stocks on Wall Street. Both The Philadelphia Gold and Silver index and the CBOE Gold index were down 1.7% recently, while the Amex Gold Bugs index was down 2.3%.

Among the biggest decliners,

Golden Star Resources

(GSS) - Get Golden Star Resources Ltd. Report

was down 4.1% and


(GOLD) - Get Barrick Gold Corporation (BC) Report

was down 3.7%.

The newly launched

Market Vectors-Gold Miners

(GDX) - Get VanEck Gold Miners ETF Report

exchange-traded fund, which tracks the performance of the Amex GoldMiners Index, was down 2%.

ETFs tracking the metals themselves were also falling. The

iShares Silver Trust

(SLV) - Get iShares Silver Trust Report

was recently down 0.2%, while the

StreetTRACKS Gold Trust

(GLD) - Get SPDR Gold Shares Report

was down 0.7%.