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Gold Weakened By Lackluster Demand From India And The U.S. Dollar

|Includes:SPDR Gold Trust ETF (GLD), SIL, USD

After rising by 5.1 percent in September and reaching a six-week high last Friday, gold prices are correcting lower on stronger U.S. dollar and slowing demand from India- the biggest physical buyer of gold in 2011.

On the Comex in New York, gold futures for December delivery registered their biggest decline since November 20 retreating by 0.4 percent to $1,742.30 per ounce. Silver futures also fell by 0.5 percent to $34.04 per ounce in New York trading. For most recent quotes, see the latest gold prices or find out how you can invest in gold at BullionVault.

Investors were hesitant to open new gold positions as the U.S. dollar bounced higher following its decline last week. A sequence of upbeat U.S. economic data with consumer confidence at the highest level in more than four years and home prices rising by the most since 2010, coupled with a statement by the Dallas Fed President Richard Fisher that "accommodative policies can't be left forever", offered a boost to the greenback.

Gold's retreat, however, could prove to be temporary. Uncertainty about the U.S. "fiscal cliff" and renewed U.S. dollar weakness could see gold futures regaining their bullish momentum. Despite of the flagging demand from India, data compiled by Bloomberg showed holdings of exchange-traded products that are backed by gold rising to a new record level of 2,607 metric tons yesterday. Demand for gold coins is also picking up according to a report issued by the U.S. Mint office which showed 67,000 ounces of American Eagle coins sold so far this month, compared with 59,000 ounces for the month of October.

Stocks: GLD, USD, SIL