Gold prices moved lower on Monday morning as a stronger U.S. dollar cut into the precious metal's hedge value. The drop was the second straight for gold, which gained in the three previous session.
April-dated gold futures ended at $916.80 per ounce, down $7.70 for the day. Prices dropped as low as $910.40 in the early going.
The dollar rallied to its best level in two weeks versus the euro and a 1 1/2-week best against the pound as traders turned to lower-yielding currencies. Gold usually moves opposite the dollar.
Stock markets have declined after the U.S. government stated that bankruptcy might be the best solution for troubled automakers in the country, including General Motors, whose CEO Rick Wagoner has been forced to quit the job.
Meanwhile, financial stocks fell as Treasury Secretary Timothy Geithner said some banks could need additional assistance.
Crude oil prices also dropped sharply, further reducing gold's hedge value. Light sweet crude for April fell to $48.41, down $3.97 for the session.
Gold plunged $16.70 on Friday as its safety value was reduced by a stronger dollar. The loss was the first in three sessions for the precious metal. However, for the week, gold lost $35.20 for the session.
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