Gold was trading in a narrow range below $1,250 an ounce on Wednesday, with strong U.S. housing data stoking fears the Federal Reserve would soon begin rolling back stimulus measures that burnish the metal’s appeal as a hedge against inflation.
Spot gold had ticked up 0.1 percent to $1,244.11 an ounce by 0012 GMT, after dropping 0.7 percent in the previous session. The metal, which hit a 4-1/2 month low of $1,227.34 earlier this week, is likely to fall further as physical demand has not picked up strongly enough to support prices.
Permits for future U.S. home construction marked a near 5-1/2 year-high in October and prices for single-family homes notched big gains in September, suggesting a run-up in mortgage interest rates has not derailed the housing recovery.
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