Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures fell on Wednesday for a second day, down more than $20 an ounce as the dollar rose against a basket of other major currencies, reducing the appeal of gold as an investment alternative. Gold futures for February delivery tumbled $20.6, or 2.3%, to close at $882.0 an ounce on the New York Mercantile Exchange. On Tuesday, it closed down 80 cents at $902.6.

The dollar index, which tracks the value of the greenback against a basket of other major currencies, rose for the first time in five days, up 1% to 76.3 after better-than-expected U.S. output data. Dollar-denominated gold tends to move in the opposition direction of the greenback. "There has been a reversal of recent trends and the dollar has strengthened and oil and commodities have sold off from overbought conditions," said Mark O'Byrne, analyst at Gold and Silver Investments Ltd. "Corrections in most markets were expected as recent movements had been sharp." See full story.