Gold Prices Drop as Dollar Gains; Metal Declines 1.8% in Week

BY

Gold prices fell in New York as an increase in the value of the dollar eroded the appeal of the precious metal as an alternative asset.

Gold generally moves in the opposite direction of the dollar, which reached a two-week high against the euro after U.S. retail sales last month increased more than forecast.

The metal dropped 1.8 percent this week, snapping a two-week rally. Gold still is up 24 percent this year, while the dollar has dropped 7 percent against the euro.

Gold futures for December delivery fell $1.60, or 0.3 percent, to $644.40 an ounce on the Comex division of the New York Mercantile Exchange. Prices yesterday dropped 2.4 percent, the most since July 18.

Silver futures for September delivery dropped 225 cents, or 1.8 percent, to $11.885 an ounce. Prices have gained 65 percent in the past year.