US gold futures drop nearly 2 percent on Tuesday as a stronger dollar and broad-based commodity weakness sent bullion briefly below $880 an ounce. The August gold contract on Comex division of New York Mercantile Exchange down $11.50 or 1.3 percent at $885.50 an ounce at 10:19 am EDT (1419 GMT).
August futures tumbled earlier to a low of $878. The session high was $900.60. Gold sentiment turns bearish after Federal Reserve Chairman Ben Bernanke cites inflation threat and signs of a strong dollar policy.
Possible higher futures trading margins, lower open interest due to liquidation pressure gold, said RBC Capital Markets Global Futures Vice President George Gero said. Spot gold was quoted at $881.45/882.45 an ounce, compared with $891.25/892.65 in late Monday trade.
July platinum was down $23.60 or 1.2 percent at $1,992.00 an ounce. Spot platinum was quoted at $1,982.50/2,002.50. September palladium was down $3.20 at $436.90 an ounce. Spot palladium quoted at $429/437. July silver futures were down 26.0 cents or 1.5 percent at $16.650 an ounce. Ranged $16.960 to $16.465. Spot silver was at $16.62/16.68 an ounce versus the $16.81/16.87 late quote of Monday.