Gold declines as precious metals buyers respond to rising dollar

Gold prices dropped on July 16, as precious metals buyers responded to a rising dollar triggered by speculation surrounding the euro zone.

Spot gold was trading 0.6 percent lower at $1,580.16 an ounce at 12:15 GMT, according to Reuters. August gold was $11.90 per ounce lower at $1,580.10 on the Comex division of the New York Mercantile Exchange.

Prices for the metal have dropped almost 1 percent this month. Gold was unable to extend the gains made in June as communications made by the Federal Reserve reduced hopes that it would engage in further quantitative easing, the news source reports.

Bloomberg reports that bullion for immediate delivery was trading 0.3 percent lower at $1,584.20 an ounce by 11:11 a.m. in London. August Comex gold was trading at $1,584 per ounce.

The euro declined to a two-year low against the U.S. dollar after German Chancellor Angela Merkel stated she has not changed her position on how to combat the debt problems that face the euro zone, according to the news source.