Gold prices fell yesterday in response to the dollar's bounce after healthy US economic data raised expectations of an interest rate rise next month. Prices hovered just above their lowest level in nearly six years, as spot gold fell 0.4 per cent to $1,070.46 an ounce, perilously close to the near-six-year low of $1,064.95 it hit last week. The latest drop came after it was announced that manufacturing output rose well above economists' expectations last month. A gauge of business investment plans in America also painted an optimistic picture. "The orders number is surprisingly positive and that's what's weighing on the market," Rob Haworth, the senior investment strategist for US Bank Wealth Management in Seattle, told Reuters. Gold has been put under pressure by increasing speculation that the Federal Reserve will raise US rates next month for the first time in nearly a decade. Such a move would increase the cost of holding non-yielding bullion, having a knock-on effect on prices. But Commerzbank analyst Daniel Briesemann said geo-political issues had played a part and predicted further falls for the precious metal. "The Turkey-Russia tension has only had a limited impact and now gold is back on its downward trend mainly due to the dollar and rate hike expectations," he said. "Uncertainty before the next Fed meeting will remain high and prices could head even lower in the next couple of weeks." Traders said dealings were relatively quiet ahead of America's Thanksgiving holiday today.

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