Stronger US Dollar Thrashed Gold Down

Chicago, Oct 20: On Monday, gold futures on the COMEX division of the New York Mercantile Exchange dropped as the US Dollar showed strength.

Xinhua reported, the most active gold contract for December delivery lost $10.3, or 0.87 percent, to settle at $1,172.80 per ounce.

On Monday, the precious metal was put under pressure as the US Dollar Index rose. The index is a measure of the dollar against a basket of major currencies.

Gold and the dollar typically move in opposite directions, which means if the dollar rises, gold futures will fall as gold measured by the US dollar, becomes more expensive for investors.

Gold was put under further pressure as a report released by the National Association of Home Builders showed its Housing Market Index rising to 64 in October. Analysts noted this is the highest reading of this measure since 2005. This report may also raise expectations for the housing starts report due out on Tuesday.