RTTNews - Gold inched higher on Tuesday and moved off of a 3 1/2-week low as the U.S. dollar eased against its European rivals. The producer price index also increased at a slower rate in May, reducing gold's appeal as a hedge against inflation.
August gold contracts settled at $932.20 per ounce, up $4.70 on the session. The metal as high as $940.60 in the early going.
The dollar turned away from near-term highs against the euro and sterling as traders expressed caution ahead of next week's Federal Open Market Committee meeting. Gold usually moves in the opposite direction as the dollar because of the precious metal's hedge value.
The Labor Department revealed that producer prices rose 0.2 percent in May. This followed a 0.3 percent increase for April and a 1.2 percent decline for March.
In other economic news, Commerce Department report showed that housing starts rose 17.2 percent to an annual rate of 532,000 units in May from the revised April estimate of 454,000. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month.
Later, a Federal Reserve report showed that industrial production fell 1.1 percent in May following a revised 0.7 percent decrease in April. Economists were looking for a drop of 1.0 percent.
Gold had dropped a combined $34.50 in the last two sessions. Overall, the metal has been trending lower since reaching as high as $992.10 earlier this month.
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