Gold futures fell after the dollar rebounded against the euro, eroding the appeal of precious metals as alternative investments...
Gold futures fell after the dollar rebounded against the euro, eroding the appeal of precious metals as alternative investments.
The dollar rose as much as 1.3 percent against the euro after the European Central Bank signaled that a 25 basis-point increase in its benchmark lending rate today may be enough to control inflation. Gold still has climbed 42 percent in the past year as the ECB held rates steady while the Federal Reserve slashed borrowing costs and the dollar sank.
Gold futures for August delivery dropped $12.90, or 1.4 percent, to $933.60 an ounce on the Comex division of the New York Mercantile Exchange. The metal climbed 0.2 percent this week.
The ECB boosted it main refinancing rate to 4.25 percent, the highest since 2001, to cool inflation. The Fed cut its benchmark lending rate to 2 percent on April 30, the last of seven straight cuts from 5.25 percent in September, to head off a recession.
Interest-rate futures show a 52 percent chance the Fed will raise the federal-funds rate to 2.25 percent by Sept. 16, compared with a 19 percent chance a week ago.