Gold at four-month high on disappointing U.S. economic data

By Frank Tang and Clara Denina

NEW YORK/LONDON (Reuters) - Gold rose to a four-month high on Tuesday, extending its winning streak to a fourth consecutive session after disappointing U.S. consumer confidence and a lackluster gain in home prices fuelled concerns over the pace of U.S. economic recovery.

The S&P/Case-Shiller 20-city home price index showed U.S. home price gains slowed in December, underscoring a loss of momentum in the housing recovery, while a separate report showed consumer confidence drifted lower this month.

Bullion reversed its strong inverse link with equities that was evident earlier this year with global stock markets plagued by economic uncertainties.

On Tuesday, U.S. equities measured by the Standard & Poor's 500 index eased after gaining 1 percent to an intraday record high in the previous session.

"It isn't inconsistent with the macroeconomic environment of artificially low-interest rates that virtually every asset class can do very well," said Rick Rule, chairman at Sprott U.S. Holdings, referring to gold's recent gain in tandem with equities.

Spot gold hit its highest since October 30 at $1,343.40 an ounce after the U.S. data. It was trading up 0.3 percent at $1,340.26 an ounce by 3:37 p.m. EST (2137 GMT).

U.S. COMEX gold futures for April delivery settled up $4.70 to $1,342.70 an ounce, with volume about 25 percent below its 30-day average, preliminary Reuters data showed.

A spate of soft economic data from the United States and China since the start of the year has drawn investors back to gold, which has risen more than 10 percent so far after a 28 percent drop in 2013 that ended 12 years of gains.

Investors will also be looking ahead to Thursday when U.S. Federal Reserve Chair Janet Yellen speaks to the Senate Banking Committee in her semi-annual testimony about monetary policy.

An increase in holdings of bullion-backed exchange-traded funds is also reflecting some renewed interest from investors, analysts said. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.41 percent to 801.61 tonnes on Monday from 798.31 tonnes on Friday.

Turkey cut its gold holdings by 31.171 tonnes to 488.578 tonnes in January, data from the International Monetary Fund (IMF) showed.

Among other precious metals, silver fell 0.6 percent to $21.82 an ounce. Platinum rose 0.2 percent to $1,434 an ounce and palladium was down 0.7 percent to $732.72 an ounce.

(Additional reporting by Lewa Pardomuan in Singapore; Editing by David Evans, Keiron Henderson, Nick Zieminski and Cynthia Osterman)