Gold ends sharply lower as oil sinks, dollar up

Gold finished sharply lower after a volatile session on Wednesday as a combination of retreating oil, a higher dollar and recovering U.S. stocks pulled the precious metal from its earlier highs.
Spot gold was at $948.30/949.90 an ounce by New York's last quote at 1815 GMT, down from $961.75/963.15 an ounce late in New York on Monday.
Its session low was $943.70, which marked the weakest level since July 11, with a wide trading range of more than $30.
Oil fell as much as $5 a barrel to a six-week low as a tropical storm moving over the Gulf of Mexico was expected to miss most major oil and gas installations.
"Clearly, gold's weakness has to do with oil prices. I think the market was caught very long as people were trying to push gold through $975 and possibly $1,000," said Bruce Dunn, vice president of trading at Auramet Trading in New Jersey.
Dunn also cited weak physical gold demand from India and the Middle East due to high prices and hawkish comments from a Federal Reserve official.
Philadelphia Fed President Charles Plosser said on Tuesday rising inflation could force the Fed to start raising interest rates. Plosser is a voting member of the Fed's policy-setting committee.
""We're still in a upward channel but I think $940 gold is critical to hold support," Dunn said