Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures ended lower Monday, a reversal of fortunes chalked up to a stronger dollar, with trading dominated by positioning ahead of the Federal Reserve�s midweek policy statement. Gold for December delivery retreated $7, or 0.5%, to $1,350.60 an ounce on the Comex division of the New York Mercantile Exchange. Gold gained 2.5% last week, including a 1% advance on Friday.

The metal started off higher, but lost steam as the dollar strengthened. A stronger dollar is usually negative for commodities such as gold as it makes them more expensive to holders of other currencies. And, for gold, a higher dollar also runs contrary to gold�s main support pillars in recent months: fear of inflation and of currency debasement. The dollar index, which measures the greenback against a basket of six major currencies, reversed higher after the Institute for Supply Management�s index of U.S. manufacturing activity rose in October. The ISM index rose to 56.9 in October, more than analysts had expected. Construction spending also showed a surprise rise. See full story.