Gold fell on Tuesday, as the dollar rebounded following upbeat U.S. housing data that supported views of a looming interest rate increase by the Federal Reserve, while silver tumbled on the heels of falling copper prices.

U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes, suggesting that the economy was firing on almost all cylinders.

Spot gold was down 0.1 percent at $1,116.73 an ounce by 3:19 p.m. after falling as much as 0.7 percent. U.S. gold for December delivery settled down 0.1 percent at $1,116.90 an ounce.

Spot silver was the worst-performing precious metal, dropping as much as 4 percent to $14.70 an ounce, its biggest tumble since July 7. It was pressured by a six-year low in copper prices as worries about weak demand growth from top consumer China were reinforced by tumbling equity prices in Shanghai.

Spot palladium fell by as much as 3.8 percent to $588.75 an ounce, the lowest since Aug. 4.

The dollar traded up 0.2 percent against a basket of leading currencies, while European shares were mixed and U.S. stocks were lower, following a 6 percent slump in Chinese markets. Platinum fell 0.5 percent to $989 an ounce.

Source: Bloomberg