Daily Gold Update

Source: MarketWatch

New York— Gold futures turned lower Monday on the heels of two winning sessions, dropping from their highest level in six months as the U.S. dollar rose sharply against the British pound, reducing the metal's investment appeal. Gold for February delivery ended down $20.60, or 2.2%, at $906.70 an ounce on the Comex division of the New York Mercantile Exchange. It rose 3.5% last week to end at $927.30 an ounce, the highest closing level for a front-month contract since July. Trading more actively, the April gold contract fell 2.3% to $907.20 an ounce.

Worries about the depth of the global economic downturn supplied further support for the dollar to start the week. The British pound, back under heavy selling pressure, fell as much as 3% against the greenback. However, the dollar index, which gauges the value of the greenback against a basket of its major rivals, fell 0.5%. Dollar-denominated gold prices and the greenback tend to move in opposite directions. See full story.