Gold Drops on Trade Deficit News

Gold prices dropped Wednesday morning as the dollar rose against other currencies after data showed the U.S. trade deficit in March narrowed unexpectedly.

The U.S. trade deficit narrowed to $54.99 billion in March from a revised $60.57 billion in February and well below economists' forecasts for a $61.5 billion deficit.

Gold prices dropped Wednesday morning as the dollar rose against other currencies after data showed the U.S. trade deficit in March narrowed unexpectedly.

The U.S. trade deficit narrowed to $54.99 billion in March from a revised $60.57 billion in February and well below economists' forecasts for a $61.5 billion deficit.

Gold prices on the New York Mercantile Exchange's COMEX division slipped to $426.60 an ounce by 9:56 AM PDT.  A strong dollar usually weighs on dollar-denominated gold as it gets more expensive for buyers holding foreign currencies.

Gold had been trading near a three-day high before the latest trade report today.  Economists predicted that the deficit would widen to a record in March, limiting demand for the dollar and boosting gold's appeal as an alternative investment.

However, later in the day Wednesday Reuters reported that gold futures spiked after reports that the White House and U.S. Capitol building were being evacuated, and fighter jets were scrambled above Washington.