Gold Price Down Sharply Depressed US Dollar Strengthening

. Gold futures contract on the COMEX division of
the New York Mercantile Exchange fell sharply
at the end of trading Tuesday (Wednesday
morning GMT), as the US dollar strengthened
and equities stabilized.
The most active gold contract for April delivery, down USD25 or 1.84%, to close at USD1.331.2 per ounce.

The US dollar continued to rise from a three-year low, as investors shrugged off concerns about the US budget deficit and focused on US government debt auctions this week.

The US dollar index, which measures the greenback against six major counterparts, rose 0.6% to 89.724 at 1900 GMT.

Because most commodity prices are in US dollars, a stronger in the US currency can create pressure on assets such as gold, which reduces its appeal among buyers using weaker currencies.

As for other precious metals, silver for March delivery fell 27.4 cents, or 1.64%, to settle at USD16.438 an ounce. Platinum for April delivery fell USD8.3, or 0.82%, to close at USD1.004 an ounce.
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