RTTNews - Gold dropped to its lowest level in more than three weeks on Friday as traders bet the threat of inflation has subsided. Crude oil prices also fell, lowering gold's hedge value.

August-stamped gold futures closed at $940.70, down $21.30 on the session. The metal touched as low as $936.20.

The precious metal lost $21.90 from last Friday's close, its second straight weekly decline. The metal lost $18.40 amid choppy trading last week after hitting as high as $992.10. The metal had climbed in each of the previous four weeks.

The dollar was little-changed against other major currencies, reducing the need to turn to the precious metal as a hedge investment. The greenback lingered near 1.4000 against the euro, holding some gains from earlier in the week.

Crude oil prices fell 64 cents to $72.04 per barrel, moving off of a multi-month high.

Traders pondered a Labor Department report that showed that import prices rose 1.3 percent in May following a revised 1.1 percent increase in April. The continued increase in prices was largely due to an 8.3 percent increase in petroleum import prices.

Additionally, the Labor Department said that export prices rose 0.6 percent in May after edging up 0.4 percent in the previous month. A 3.6 percent increase in the prices of agricultural exports contributed to the moderate increase.

Later, the Reuters/University of Michigan consumer sentiment report showed a preliminary reading for June of 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to a reading of 69.5.

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