Gold falls to 6-week low as dollar rises

Gold prices fell on Monday, resuming losses after taking a breather on Friday, and hit a 6-week low as the US dollar rose against its peers.

Gold prices fell 0.7% to the lowest since August 12 at $1,742.02 an ounce, after opening at $1,754.08, and hit a high of $1,755.17.

Gold closed higher by 0.1% on Friday, after suffering the largest 2-day loss since August 6.

Gold prices lost 1.8% last week, the second straight weekly loss, as investors focused on the US dollar as the best investment.

The dollar index rose 0.2% on Monday, the third profit in a row, marking month highs at 93.40 against a basket of major rivals.

The gains come amid increased investor interest on the greenback following increased bets on policy tightening in the US before yearend. 

The Fed will convene tomorrow to decide on monetary policy and provide clarity over the future of monetary policy in the US, amid expectations to keep the interest rate unchanged and to start cutting its asset purchase program. 

Gold stocks at the SPDR ETF rose 1.74 metric tonnes yesterday, with the total at the highest since August 25 at 1001.66 metric tonnes.