NEW YORK (TheStreet) -- Gold prices sank Tuesday as investors pivoted to the U.S. dollar as a safe haven, thanks to stronger-than-expected home prices.
Gold for August delivery settled down $13.50 to $1,575.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,588.40 and as low as $1,568.20 an ounce, while the spot price was dropping $12.30, according to Kitco's gold index.
"The dollar continues to be the safe haven, of course the other thing that happened was we had ... a stronger housing market," said Adrian Day, president of Adrian Day Asset Management.
Silver prices lost 48 cents as it settled at $27.04 an ounce while the U.S. dollar index was dipping .06% at $82.41.
Gold had rallied in the past few weeks as U.S. economic data proved weaker than anticipated, but Tuesday's Case-Shiller home-price index showed improvement against March and Monday's new-home sales showed a promising 7.6% jump in May -- a suggestion that the real estate sector is firming up.
The yellow metal could prove resilient in the near-term as European leaders meet this week to consider possible stimulus plans, and as the U.S. continues to hold out for possible easing from the Federal Reserve.
"The eurozone leaders will meet, starting this Thursday, and they really need to present the market a blueprint for where they're going to go and how they're going to address everything, instead of just putting fires out one at a time," said Chuck Butler, world markets president at EverBank. "If they do that, I think a lot of confidence comes back and the risk-assets including gold could see a rebound."
The scenario could be a bit too rosy, because Butler also said that the market appears to be prepared for another disappointment.
"I learned many, many years ago that the markets are never wrong," Butler said.
The consensus for gold this week seems to be that if eurozone leaders reach an agreement to buoy fragile markets, then we could see a bump in gold, but if investors receive more of the same news, the dollar could be the safe-haven move.