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LONDON (Thomson Financial) - Gold plunged over 2 percent and headed towards $900 as the dollar strength wiped the appeal of commodities priced in the greenback.

Elsewhere, copper was lower and oil fell over $2.

"For an abbreviated trading week, the economic calendar is packed with potentially dollar-moving data, thus a careful watch needs to be kept on the numbers practically every day," said Kitco analyst Jon Nadler.

Earlier, U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday, a sombre indication that the housing slump continues to deepen.

Standard & Poor's/Case-Shiller said its national home price index fell 14.1 percent in the first quarter compared with a year earlier, the lowest since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.

The precious metal, often seen as an inflation hedge, moves in line with record oil prices which have now eased from peak levels around $135, thus reducing gold's appeal.

A stronger dollar, meanwhile, reduces investment in gold as commodities priced in the greenback become relatively more expensive for those trading in stronger currencies.

"Volatility looks set to remain high in the coming days with the dollar and oil to continue providing much of the metals intra-day direction, while inflation pressures and ongoing credit market issues provide background support," said TheBullionDesk.Com analyst James Moore.

The U.K. and U.S. markets were closed yesterday for public holidays.

Later today, the Conference Board's survey of consumer confidence is expected to have dipped in May to 60.0 from 62.3 in the previous month.

At 2:43 p.m., spot gold was trading at $907.85 per ounce against $926.00 in late New York trade on Friday. Today, the yellow metal has so far traded in a wide range as high as $930.68 and dipped to a day low of $906.30.

In other precious metals, platinum was lower at $2,135 per ounce from $2,172 Friday.

Meanwhile, sister metal palladium edged down to $443 per ounce from $452.

Silver fell to $17.52 per ounce from $18.23.

anealla.safdar@thomsonreuters.com

as/ra

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