Gold Drops to $1,224.15 as US Dollar Hits Five-week High

On Wednesday, spot gold dropped 0.8 percent, to $1,224.15 an ounce, as the US dollar gained against world currencies. Meanwhile, US gold futures for April delivery slid $8, to $1,224.20 an ounce.

While investor concerns about Eurozone meetings on Greek debt limited the metal’s fall, the dollar’s rise and anticipated Federal Reserve interest rate hike drove gold downward. Because the Eurozone meetings are unlikely to produce a definitive ruling on Greece’s fate, gold’s near-term performance will probably be determined by the Fed, which is expected to raise interest rates later this year, Reuters said in a recent article. Traditionally, interest rate increases lead investors away from precious metals toward riskier investments.