Gold fell as a rebound in the dollar against the euro may erode investor demand for precious metals
Gold fell as a rebound in the dollar against the euro may erode investor demand for precious metals as an alternative investment. Silver declined.
Gold has moved opposite the dollar against the euro 79 percent of the time this year. The dollar gained today for the first day in three before the Federal Reserve meets tomorrow to discuss interest rates.
There is a "threat of a stronger dollar in the near term'' before the Fed meeting, John Meyer, an analyst at Numis Securities Ltd. in London, wrote in a note today. "The Fed may raise interest rates to combat inflation.''
Gold dropped $2.45, or 0.4 percent, to $686.30 an ounce at 10:37 a.m. in London. Silver fell 3 cents to $13.475 an ounce.
Most investors expect the Fed to keep its benchmark interest rate at 5.25 percent, according to all 100 economists surveyed by Bloomberg News.