NEW YORK/LONDON: Gold edged lower on Tuesday in volume as investors strong US home prices and consumer confidence data kept investors cautious before policy meetings at the US Federal Reserve and the European Central Bank later this week.
Bullion investors took profits after data showed US home prices rose in February at their fastest rate in almost seven years, and another report showed US consumer confidence rebounded in April.
Despite those encouraging reports, data showing contraction in US Midwest business activity raised hopes that the Fed will keep its pace of bond buying at $85 billon a month throughout this year, analysts said.
Investors also positioned for an interest rate cut by the European Central Bank, but traders said that the outcome for both the ECB and the Fed was uncertain.
"Unless we get something dramatic happening, such as real further easing by the ECB this week, I think we will be in a consolidation mode with very choppy trade," said Michael Zarembski, senior commodities analyst at optionsXpress, a unit of Charles Schwab.
Gold dropped 0.2 percent to $1,473.54 by 2:58 p.m. (1858 GMT)
US Comex gold futures for June delivery settled up $4.70 at $1,472.10 an ounce, with trading volume about 35 percent below its 30-day average, preliminary Reuters data showed.
Bullion has recovered more than half the $225-per-ounce loss it incurred between April 12 and 16, driven by strong physical demand around the world especially in top bullion consumers China and India.
Gold prices sank to $1,321.35 on April 16, their lowest in more than two years, after a drop below $1,500 led to a further sell-off that stunned investors and prompted them to keep slashing holdings of exchange-traded funds.
Gold investors also look forward to Friday's all-important US non-farm payrolls data, which will signal the longer-term prospect of the Fed's monetary stimulus.
Silver fell 1.3 percent to $24.19 an ounce.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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