Gold Prices Fall With Equities

{Gold story updated to reflect price changes, additional background, and additional analyst commentary)
NEW YORK (TheStreet) -- Gold prices continued to drift lower Tuesday as a consumer confidence reading was released and a day after better-than-expected new home sales were reported.

Also on Tuesday -- it was reported that The Standard & Poor's/Case-Shiller index of 20 U.S. cities showed that home prices in May were up 4.6% from where they were the previous year -- the largest year-over-year increase since August 2006.

Gold for August delivery was down $24.60 to $1,158.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,186.50 and as low as $1,156.90. The U.S. dollar index was up 0.3% at $82.29, while the euro was falling 0.2% at $1.30 vs. the dollar. The spot gold price was falling $22.20 to $1,159.90.

At 10 a.m. Tuesday, The Conference Board said its Consumer Confidence Index, which had declined sharply in June, retreated further in July. The Index now stands at 50.4, down from 54.3 in June. The Conference Board said consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook. It said that concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves.

As expected, the broader equity markets fell in response to the readings; meanwhile gold prices remained in descent.

Gold, a safe-haven asset, as well as treasuries and the dollar, slid the day before as stocks and industrial commodities rose, following news that U.S. new home sales exceeded expectations, rising to 330,000 units in June from 267,000 in May. At the same time, "investors shrugged off comments from Treasury Under-Secretary Lael Brainard warning against the dangers of withdrawing economic stimulus too quickly for fear of damaging global recovery," James Moore of BullionDesk.com wrote in a morning note.

Moore said that a "re-test of the $1,165 level is on the cards," as gold remains under pressure amid "stale liquidation" and an increase in spec shorts. Meanwhile, Adrian Ash of the BullionVault in his daily note cites investment managers' opinion that positive long-term support for gold will continue in the form of falling mine supply and the potential for a reduction in net central-bank sales."

Pratik Sharma of MD Atyant Capital tells TheStreet that he personally still see good levels of support in the "$1,160-ish range ... below that ... 200-day moving average ... which is probably around the $1,140 range, is probably the next level of support, and then below there, you obviously have a psychologically round number of support which is $1,100."

The World Gold Council reports that the gold price had a strong performance during the second quarter, ending the quarter at $1,244 an ounce, on the London PM fix, 11.5% higher quarter-on-quarter; in euro terms, gold had one of its largest gains, increasing 23.1% over the quarter.

The World Gold Council said that the robust investment activity suggests that gold remains an asset in demand, as investors seek out the yellow metal for protection, diversification, liquidity and risk management. Investors bought 273.8 net tonnes of gold through exchange traded funds in the second quarter, according to the Council.

Silver prices were falling 56 cents to $17.65, while copper prices were at $3.21.

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Gold mining stocks, a more risky but more profitable way to invest in gold, were trading in red Tuesday. Kinross Gold ( KGC) was falling 2.6% to $15.76, while Yamana Gold ( AUY) was losing 2.3% to $9.24.

iShares COMEX Gold Trust ( IAU) was tumbling 1.8% to $11.35 and AngloGold Ashanti ( AU) was retreating by 1.2% to $39.61.

-- Reported by Andrea Tse in New York

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