Gold drops as dollar hits three-week high

Gold futures fell for the fifth session out of six away from the highest since September 26, marking the lowest since October 6, as the dollar index muscled up for a second session, amid a lack of data from the US, the world's largest economy. 

As of 02:53 GMT, gold futures due on December 16 fell 0.43% to $1,275.00 an ounce from the opening of $1,280.50, while the dollar index rose 0.28% to 93.96 from the opening of 93.70, marking the highest since October 6. 

As the outlook brightens, investors are moving liquidity away from safe havens and precious metals towards higher yielding assets, such as stocks, in turn weighing on gold futures. 

Otherwise, the dollar index marches to three-week highs as US treasury bond yields surge, with two-year bond yields hitting nine-year highs, while 10-year bond yield rose 6 basis points to 2.38%. 

Markets are pricing in a probable third interest rates hike by 26 basis points later this year, while President Donald Trump is expected to choose a policy hawk as the new Federal Reserve Chair.