Gold prices drop 2 percent as dollar gains ground against other currencies

Gold prices fall sharply as dollar rebounds

NEW YORK — Gold prices have fallen sharply as the dollar rebounds against the euro and the British pound.

The dollar’s gains come ahead of Thursday’s interest rate decisions from the European Central Bank and the Bank of England. Both are expected to keep their historically low benchmark rates on hold.

The upward move in the dollar marks a pause in a steady decline since March. Gold prices tend to move inversely with the dollar, as the precious metal is used as a hedge against inflation and a weak greenback.

Gold for August delivery is down $18.80, or 1.9 percent, to $965.60 an ounce on the New York Mercantile Exchange.