Gold prices turn flat after Iran deal, track oil

Reuters, NEW YORK/LONDON, (26/11) - Gold prices were nearly unchanged on Monday after a volatile trading session that saw prices tumble early with crude oil after a deal on Iran's nuclear program, then recover as investors covered short positions, traders said.

Early in the day, bullion prices fell 1 percent to a four-month low, after a weekend agreement which halts Iran's most sensitive nuclear activity and suspends some sanctions by the United States and the European Union on several sectors of Iran's economy for an initial six-month period. Mixed U.S. economic reports had little effect on gold prices. Data showed contracts to buy previously owned U.S. homes hit a 10-month low in October, but a strong rebound in services sector activity early this month suggested some resilience in the economy. Spot gold touched its lowest level since July 8 at $1,227.34 an ounce in earlier trade, but managed to cut its losses. Bullion was last 0.1 percent lower at $1,241.49 by 1:26 p.m. EST (1826 GMT). U.S. gold futures for December delivery fell $2.70 to $1,241.40 an ounce, with trading volume on track to finish sharply above its 30-day average, preliminary Reuters data showed.