NEW YORK — Expectations of lower oil prices and continued low inflation sent the dollar edging higher against most major currencies Monday and knocked the price of gold sharply lower.
Republic National Bank of New York said gold bullion was bid at $316.50 an ounce at 4 p.m. EST, down $6 from Friday's late bid.
Gold fell below $320 an ounce in some markets for the first time since a brief dip in early September, said Larry Schoen, vice president and chief bullion dealer at Rhode Island Hospital Trust National Bank in Providence, R.I.
Analysts said the prospect of lower oil prices raised hopes that the U.S. economy would enjoy non-inflationary growth. Low inflation keeps returns attractive on investments in the United States. But low inflation provides less of an incentive to buy and hold gold, which pays no interest and primarily is bought to preserve capital against the threat of inflation.
Currency dealers said trading in dollars was slow in the usual pre-Christmas lull.