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Gold edges lower as US dollar extends gains

Chicago: Gold futures on the COMEX division of the New York Mercantile Exchange closed lower on Tuesday as the US dollar modestly rallied for a second straight session, and European and the US stocks regained their footing.

The most active gold contract for December delivery lost $5.1, or 0.46 percent, to settle at $1,102.60 per ounce, Xinhua news agency reported.

The US Dollar Index, a measure of the dollar against a basket of six major currencies rose by 0.35 percent as of 1830 GMT.

Gold and the dollar typically move in opposite directions, which means a stronger dollar can be a negative for commodities including gold, priced in dollars, because it makes them more expensive for non-dollar consumers, while a weaker dollar can support commodities.

Gold prices somewhat shed their losses after two major reports released by the US government showed retailer sales rose a modest 0.2 percent in August, and industrial production fell a seasonally adjusted 0.4 percent last month.

Analysts believed those data seemed weaker, but basically in line with expectations.

The Federal Reserve will release its crucial policy statement Thursday afternoon following a two-day meeting during which the Fed would make a decision whether to raise its benchmark interest rate for the first time in more than nine years.

Among other metals, silver for December delivery dropped 3.7 cents, or 0.26 percent, to close at $14.326 per ounce. Platinum for October delivery added $2.8, or 0.29 percent, to close at $958.2 per ounce.