Gold drops as dollar climbs ahead of Fed's minutes

Gold futures fell in American trade for the third straight session away from the highest since June 6, as the dollar index hit the highest since July 26, following earlier housing data from the US, and ahead of the Federal Reserve's meeting minutes. 

As of 02:57 GMT, gold futures due on December 16 fell 0.27% to $1,276.20 an ounce from the opening of $1,279.70, while the dollar index rose 0.20% to 94.04 from the opening of 93.85. 

Earlier US data showed building permits fell more than expected as housing starts declined unexpectedly in July, as markets now await the Fed's last meeting minutes, at which policymakers voted to maintain interest rates at between 1.00% and 1.25%, while confirming their plan to normalize the massive $4.5 balance sheet later this year. 

Gold is giving up ground this week on profit-taking after hitting two-month highs last week, as tensions dissipate over the US-North Korea situation after senior US officials, including CIA director Pompeo, dismissed the possibility of an escalation from words to actual fight on the ground between the two countries.