December gold futures, the most active contract, were last up 30 cents at $936.10 an ounce on the New York Mercantile Exchange. "For now, we see gold holding the current $920-to-$965 range, but should equities succumb to further pressure, gold will likely be dragged lower as investors are forced to liquidate assets to cover margin requirements," wrote James Moore, analyst at TheBullionDesk.com, in a note to clients. In currency trading, the dollar erased an earlier decline against the euro as government data showed that U.S. housing starts were flat in July but that producer prices fell 0.9% on the month. The greenback had earlier slipped after a survey showed German investor confidence hit its highest level in more than three years and after British inflation failed to show an expected decline. The dollar index (DXY 79.29, -0.01, -0.01%) , which tracks the greenback against a trade-weighted basket of six major currencies, recently stood at 79.329, up from 79.288 late Monday. Dollar strength typically pressures dollar-denominated commodities such as gold and oil, because its makes them more expensive for holders of other currencies. Also in Nymex metals action, September silver futures fell 13 cents to $13.85 an ounce, extending Monday's big losses, and September copper gave up 3 cents to $2.74 a pound.

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