* Gold posts biggest one-day loss in nearly a month
* Surging U.S. new home sales data reduces safe-haven demand
* Recovering gold prices rekindle fund interest in options
By Frank Tang and Clara Denina
NEW YORK/LONDON, Feb 26 Gold fell almost 1
percent on Wednesday, retreating from a four-month high as a
dollar rally and surging U.S. new home sales dented bullion's
The precious metal accelerated losses after the Commerce
Department said that sales of new U.S. single-family homes
jumped nearly 10 percent to a 5-1/2-year high in January.
Prior to Wednesday, gold had posted a four-day winning
streak with prices up more than 2 percent as disappointing U.S.
home prices and consumer confidence fueled concerns over the
pace of economic recovery.
"This correction is long overdue. You are seeing improved
economic conditions continue to weigh on the market," said
Phillip Streible, senior commodities broker at RJ O'Brien.
Spot gold touched its highest level since Oct. 30
at$1,345.35 an ounce earlier in the day. It was last trading
down 0.8 percent at $1,328.80 by 2:16 p.m. EST (1916 GMT), its
biggest one-day loss in nearly a month.
U.S. COMEX gold futures for April delivery settled
down $14.70 at $1,328 an ounce, with trading volume about 10
percent below its 30-day average, preliminary Reuters data
The dollar rose to its highest level in two weeks against a
basket of major currencies.
The recent recovery in gold prices has rekindled interest in
gold options from hedge funds, said COMEX gold option floor
trader Jonathan Jossen.
However, option positioning in gold suggests futures prices
are unlikely to rise or fall in an explosive way, Jossen added.
Traders said that gold also benefited as the world's biggest
bitcoin exchange stopped trading, a move that sparked concerns
about the future of the unregulated virtual currency.
Also weighing on prices was news that Hong Kong's net gold
exports to China fell 5.4 percent to 89.745 tonnes in January
from 94.847 tonnes in December, reflecting a slowdown in demand
from record levels in 2013.
Analysts said, however, the gold market was underpinned by
an increase in holdings of bullion-backed exchange-traded funds
(ETFs), highlighting renewed investor interest in gold.
SPDR Gold Trust, the world's largest gold-backed ETF,
said its holdings rose 0.26 percent to 803.70 tonnes on Tuesday
from 801.61 tonnes on Monday.
Among other precious metals, silver fell 2.6 percent
to $21.26 an ounce. Platinum dropped 0.8 percent to
$1,422.10 an ounce and palladium was down 0.5 percent at
$728.75 an ounce.
2:16 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1328.00 -14.70 -1.1 1322.30 1345.60 138,100
US Silver MAR 21.254 -0.709 -3.2 21.085 22.035 69,327
US Plat APR 1429.10 -13.50 -0.9 1425.20 1441.50 7,912
US Pall MAR 731.50 -4.60 -0.6 726.50 737.00 5,053
Gold 1328.80 -11.34 -0.8 1322.85 1345.35
Silver 21.260 -0.560 -2.6 21.110 22.020
Platinum 1422.10 -10.80 -0.8 1427.00 1438.50
Palladium 728.75 -3.72 -0.5 729.00 736.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 142,140 154,989 182,489 16.41 0.25
US Silver 137,352 68,489 58,058 26.88 -0.94
US Platinum 8,105 9,818 13,300 17.36 0.16
US Palladium 13,968 7,451 5,773 13.94 0.68