Gold has sharpest single-day loss in six weeks on U.S. housing data

By Luc Cohen and Clara Denina

NEW YORK/LONDON (Reuters) - Gold fell to its lowest level in more than a week on Wednesday, suffering its sharpest single session loss in over six weeks after a report showed strong U.S. home sales in March, raising expectations for a June U.S. Federal Reserve interest rate hike.

Spot gold was down 1.3 percent at $1,186.63 an ounce by 2:47 p.m. EDT (1847 GMT), after falling as low as $1,185.33, the lowest level since April 14.

That represented gold's sharpest single-session loss since March 6.

U.S. gold futures for June delivery fell $16.20 an ounce to settle at $1,186.90.

Bullion extended losses after the National Association of Realtors published an upbeat report showing that U.S. home resales hit their highest level in 18 months in March, implying the economy was gaining momentum.

This built expectations that the Fed may raise rates sooner rather than later, said Howard Wen, precious metals analyst at HSBC in New York.

"It's not as important as the payrolls report or inflation data, but it nonetheless is another factor that drives prices," Wen said of the home sales report's impact on the gold market.

A hike in U.S. rates could reduce demand for gold, a non-interest-paying asset.

The U.S. dollar reversed earlier losses against a basket of currencies on the strong home sales data.

Investors were monitoring the situation in Greece, which is quickly running out of cash. It pledged to its euro zone partners in February that by the end of April it would agree with creditors on a comprehensive list of reforms to get 7.2 billion euros remaining from its bailout.

But no package will be ready by Friday, when euro zone ministers are to meet in Riga.

"The (gold) market is growing tired of watching the Greek saga, while tensions in Yemen, an element of support to safe-haven bids, seem to have eased," Saxo Bank senior manager Ole Hansen said.

Saudi Arabia said on Tuesday it was ending air strikes against Houthi rebels in Yemen.

In the physical market, top bullion consumer India celebrated the gold-buying festival of Akshaya Tritiya on Tuesday. Gold purchases started slowly, though Wen said they picked up as the festival progressed.

Spot silver fell 1.3 percent to $15.77 an ounce. Platinum lost 1.9 percent to $1,125.25 an ounce and palladium fell 1.8 percent to $755 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Alison Williams, Susan Thomas and Chizu Nomiyama)