Daily Gold Update

Source: Marketwatch

New York— Gold futures fell more than 2% Tuesday, as strength in the U.S. dollar and declining oil prices pressured investment demand for the precious metal. Gold for June delivery dropped $20.70 to $874.80 an ounce on the New York Mercantile Exchange.

"I think the main driver today is the pricing in of the next Fed rate cut and the strength in the dollar," said Zachary Oxman, a senior trader at Wisdom Financial. "It is quite possible that the Fed has cut to the point where credit will be loosening, which would signal a renewal for the U.S. economic growth cycle," Oxman said. "If this is the case, watch for a rotation out of gold and flight-to-quality trades and back to the stock market." The dollar held onto most of its gains ahead of Wednesday's key U.S. Federal Open Market Committee decision on interest rates. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, gained 0.3% to 72.78. See full story.