Gold fell the most since April on speculation that an improving U.S. housing market will boost the case for the Federal Reserve to raise U.S. interest rates.

U.S. housing starts jumped to a seven-year high last month, government data showed Tuesday. The rise extended gains in the dollar, curbing bullion’s appeal as an alternative asset, after the European Central Bank said it will speed up bond buying. Gold has posted three straight monthly losses as the outlook for higher borrowing costs prompts investors to favor assets with better yield prospects, such as equities.

The metal dropped from a three-month high, with the rebound in housing signaling the economy may be strong enough for the Fed to start tightening this year. Minutes from the central bank’s latest meeting will be released Wednesday. Holdings in exchange-traded products backed by gold fell to the lowest since mid-January, data compiled by Bloomberg showed.

Gold futures for June delivery fell 1.7 percent to settle at $1,206.70 an ounce at 1:43 p.m. on the Comex in New York, the biggest drop for a most-active contract since April 30. On Monday, the precious metal climbed to $1,232, the highest since Feb. 17.

Source: Bloomberg