Gold tarnished by dollar run
Gold prices slip as dollar strengthens on speculation that Fed may raise interest rates sooner than expected.
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NEW YORK (CNNMoney.com) -- Gold prices extended their decline for a second straight session Monday as the dollar continued to rise.
Gold for February delivery slid $5.50 to settle at $1,164.00 a troy ounce, after shedding more than $26 earlier in the session.
Gold prices fell sharply Friday after after a much better-than-expected jobs report from the government showed employers trimming a mere 11,000 jobs in November as the unemployment rate ticked down to 10% from 10.2% in the prior month.
"We've had a substantial turn in the dollar," said Mark Hansen, director of trading at CPM Group. "People are taking a second look at their commodity exposure, especially precious metals, which have been investor favorites in the past couple of month."
Gold prices were pressured by a stronger dollar, as the greenback hit a five-week high against a basket of currencies Monday and also rose against the euro.
Commodities priced in dollars, such as gold, are pressured by a stronger buck.
The dollar has been boosted by investors' speculation that the Federal Reserve might raise interest rates sooner than expected as the economy shows signs of recovery.
Investors will be listening closely to Fed chairman Ben Bernanke's comments about the central bank's latest outlook on monetary policy Monday afternoon to gauge what the Fed's next move might be.
While gold prices may turn lower in the next week, Hansen said the setback will create an opportunity for investors who didn't get in on the precious metal's initial record run.
"Central banks aren't finished purchasing gold," Hansen said. "If you look out into the next six months to a year, there are a combination of factors supporting gold, including continued low interest rates and the weak currency situation." 
