Finally, the US housing sector is back on track posting a 24 per cent growth in June. June's rebound in new home sales should be viewed as a major boost to the US economy. But the problem is that any good news from the world's biggest economic power is a setback to the gold prices, which have been maintaining record levels in the recent past.

Bullion market is set to fall in the coming days following data from the commerce department showed a 24 per cent leap in new home sales from May to June.

The most-actively traded gold contract, for December delivery, fell $4.60, or 0.4%, to settle at $1,187 an ounce on the Comex division of the New York Mercantile Exchange.

In addition to gold, prices for US Treasurys, also perceived as a safe-haven investment, were down following government data showing new home sales increased 23.6% in June to an annual rate of 330,000, beating economist expectations of a 3.7% gain to 311,000.

However, in absolute terms, June was the second worst month for new home sales since the series began in 1963. The bounce is only because the annual rate of sales in May, the worst month, was revised down to 267,000 units - a fifth of the transaction rate at the peak in 2004. To return to the long-term average rate of housing construction, activity must at least double from here.

Still, the data has helped equity markets across the globe jump. Right from India to Europe markets rebounded on hearing the news about US housing growth.

Even though US households can borrow for 30 years at a fixed 4.59 per cent interest rate, an all-time record low, mortgage applications for home purchases continue to head downwards, the data showed.

Meanwhile, there are still too many homes on the market to suggest price stabilisation. At current rates of sale, inventory of new and existing homes listed for sale stands at almost nine months.

The latest figures helped shore up confidence about the US housing market after a raft of data pointed to renewed weakness - the property market was one of the main reasons behind the global recession and the financial crisis.

And, this has helped the markets show some rise. But, this news is a bad one for gold markets as the yellow metal will witness a fall in safe haven sales in the coming days. For gold, fear is the key. If there is panic and fear in the market, gold's demand will grow as more and more investors rush to place their money in a safe haven like gold.

The US data also helped shake markets out of the stupor that had gripped them earlier. The main point of interest was how traders would respond to the release of the stress test results.

On the surface, the results showed that Europe's banking sector is strong enough to deal with any future economic and financial shocks - the Committee of European Banking Supervisors said only seven banks failed the tests and only needed to shore up their finances by $4.5 billion.