Gold ends lower on stronger US dollar

Gold futures on the COMEX division of the New York Mercantile Exchange finished lower on Wednesday, pressured by a stronger US dollar and a surge in new US homes sales last month to the highest in more than five years.

The most active gold contract for August delivery fell 15 dollars, or 1.12 percent, to settle at 1,319.7 dollars per ounce. Tracking the most-active contracts, the losses marked the largest one-day percentage and dollar drops since July 5, according to FactSet.

Market analysts believed gold fell as sales of new US homes in June rose to a five-year high, a sign of improved economic growth that may prompt the US Federal Reserve to slow financial stimulus measures, which pressures the precious metal.

Statistics released by US Department of Commerce show that sales of new homes in the US surged in June to an annual rate of 497,000, the highest since May 2008. Analysts believe that every new economic data could add to speculations over the timing of the stimulus tapering.

Furthermore, a rise in the US dollar also weighed on dollar- denominated gold.

Similarly, silver for September delivery dropped 23.4 cents, or 1.16 percent, to close at 20.020 dollars per ounce.