Gold Moves Sharply Lower As U.S. Dollar Advances

(RTTNews) - After ending the previous session modestly higher, the price of gold showed a substantial move back to the downside during trading on Wednesday.

Gold for April delivery tumbled $20.10 to $1,845.30 a barrel after ending Tuesday's trading up $1.90 at $1,865.40 an ounce.

The steep drop by the price of gold came amid an increase in the value of the U.S. dollar, with the U.S. dollar index climbing 0.7 percent.

Concerns about the outlook for interest rates contributed to the advance by the greenback following yesterday's inflation data and today's strong retail sales data.

The Commerce Department said retail sales spiked by 3.0 percent in January after tumbling by 1.1 percent in December. Economists had expected retail sales to jump by 1.8 percent.

Excluding a surge in sales by motor vehicle and parts dealers, retail sales still shot up by 2.3 percent in January after falling by a revised 0.9 percent in December.

Ex-auto sales were expected to increase by 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.

The sharp increase in retail sales has led to concerns the Federal Reserve will be encouraged to continue aggressively raising interest rates in an effort to combat inflation.