Gold dropped slightly on Monday as the government plan to subsidize private investors' purchase of toxic assets of troubled banks reduced the need for a hedge investment. The decline was the fifth in six sessions for gold.
April-dated gold fell to $952.50, down $3.70 for the session. Prices dipped as low as $946.00 after earlier trading at $958.10.
The Obama administration released details Monday of its latest plan to solve the massive, debilitating banking crisis which continues to hold the financial system in its crushing grip.
The Treasury's response involves using up to $100 billion in funds from the $700 billion financial rescue plan passed in 2008 in addition to capital from private investors to generate an estimated $500 billion to purchase the toxic assets, a number that could double to $1 trillion over time, the Treasury said.
In other economic news, the National Association of Realtors reported that existing home sales rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January. Economists had expected sales to slip to a 4.45 million unit rate.
The dollar remained in a range near a 2 1/2-month low versus the euro and a one-month low against the sterling. Gold often moves opposite the dollar because of its hedge value.
Despite dropping in four of the five sessions last week, gold finished up $26.20 or 2.8%. Gold soared $68.70 on Thursday amid worries of inflation after the Federal Reserve's plan to buy as much as $1.15 trillion in bonds was revealed the day before.
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