By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) - Gold futures fell Tuesday for a third straight session, as the U.S. dollar remained higher a day after Federal Reserve Chairman Ben Bernanke said inflation will stay subdued, reducing gold's appeal.
Gold for December delivery fell $19.10, or 1.6%, to $1,144.30 an ounce on the Comex division of the New York Mercantile Exchange. Futures have declined about 6% since Thursday, when they hit a record high above $1,226 an ounce.
Weighing on gold prices, the dollar strengthened against the euro and most of its other major rivals. In Tuesday trading, the euro fell 0.6% against the dollar, trading at $1.474. The dollar index (DXY 76.02, +0.25, +0.33%) rose 0.4% to 76.043.
"The stronger dollar put gold back under pressure," said James Moore, an analyst at TheBullionDesk.com. However, "expectations of record low U.S. interest rates will likely limit substantial weakness in gold."
Bernanke said Monday in a speech that inflation "appears likely to remain subdued for some time," and the time for the Fed to raise interest rates could be far away.
Some analysts remained optimistic that prices will keep rising.
"Despite gold's vulnerability to a stronger U.S. dollar, we continue to see gold as well supported in the current environment," said Hussein Allidina, an analyst at Morgan Stanley, in a note.
The strength in the dollar will be "painful," but over the medium term, "gold looks especially lustrous against risk-positive commodities like energy and base metals, where fundamentals are less impressive."
Gold made gains in 17 out of the past 21 weeks. It rose in all but two sessions in November, and had repeated made fresh record highs before the recent declines. It slumped 4% Friday as dollar surged after an upbeat U.S. jobs report.
Holdings in SPDR Gold Trust (GLD 112.46, -0.65, -0.58%) , the biggest gold exchange-traded fund, stood at 1,129.97 metric tons as of Monday, unchanged from the previous session.
In other metals, December silver dropped 3.2% to $17.75 an ounce, January platinum was nearly flat at $1,444.40 an ounce, and December platinum stood at $372.80 an ounce.
