Gold Prices Pressured by Greenback

Gold prices were falling Tuesday as the value of the greenback firmed and investors speculated that authorities might start a vigorous fight against inflation.

Benchmark bullion futures were slumping $8.20 at $920.60 an ounce in recent action on the Comex division of the New York Mercantile Exchange.

Golds climb came as the dollar rose against the euro, the pound and the Japanese yen. The price of dollar-denominated assets tends to fall as the U.S. currency rallies.

Separately, leaders at the G-8 meeting in Japan expressed concern over rising commodity prices.

"The take-home finding here is that the G-8 leaders are in sync on the vilification on inflation as Public Enemy #1," writes Jon Nadler, a gold analyst at Montreal-based bullion dealer Kitco, in a research report. "Therefore, expectations that they might start acting accordingly are keeping interest rate watchers on extended work shifts."

The CurrencyShares Euro Trust(FXE Quote) and the CurrencyShares British Pound Sterling(FXB Quote) were both off 0.3%. The CurrencyShares Japanese Yen Trust(FXY Quote) was barely changed, down less than 0.1%.

The SPDR Gold Trust(GLD Quote), was lower by 0.5%.

In the precious metals patch Iamgold(IAG Quote) was losing 1.2%, weighed down by the sinking metal price.