Gold keeps rising on tension in Iraq

Gold futures on the COMEX division of the New York Mercantile Exchange Tuesday rose for the fifth session in a row amid the tension in Iraq.

The most active gold contract for August delivery rose 2.9 U.S. dollars, or 0.22 percent, to settle at 1,321.3 dollars per ounce.

Fighting in Iraq has intensified and Iraqi Prime Minister Nuri al-Maliki pledged to form a new government before July 1.

Gold also gained certain support from a Tuesday report showing that the Ifo Institute lead indicator, an indicator of Germany business confidence, was 109.7 in June, worse than economists' expectation.

Concerns over inflation were another factor that supported gold. Philadelphia Federal Reserve President Charles Plosser said Tuesday in an exclusive interview with FOX Business that interest rates might have to be raised sooner than forecast if unemployment continues to fall and inflation continues to rise.

But positive U.S. economic figures released Tuesday curbed gold 's growth somehow. Sales of U.S. new single-family houses in May surged 18.6 percent to a seasonally adjusted annual rate of 504, 000 from the prior month, the Commerce Department said, easily surpassing market consensus of 441,000.

The Conference Board consumer confidence index improved to 85.2 in June, the biggest since January in 2008, up from 82.2 in May, also beating analyst expectations of 83.7.

Gold has posted gains in 11 out of the previous 12 trading days, and has gained nearly 4 percent in the past five sessions. But, market analysts believe that the rally in gold is only temporary as it is driven by geopolitical tension in Iraq.

Silver for July delivery gained 12.7 cents, or 0.61 percent, to close at 21.043 dollars per ounce. Platinum for July delivery climbed 15.3 dollars, or 1.05 percent, to close at 1,471.9 dollars per ounce.