Gold futures in New York fell sharply on Monday as the US dollar rebounded.

The dollar index gained as much as 1.6 percent while market participants expected President-elect Barack Obama's fiscal stimulus package would help the United States recover from the economic recession. Obama has gone to Washington waiting for his inauguration on January 20.

Gold futures for February delivery forged an aggressive early washout and then fought its way out from under the selling tide. While prices generally remained ultra weak throughout the trading session, February gold had managed to bounce by as much as 18 dollars an ounce off the early lows.

February gold declined US$21.70, or 2.5 percent, to US$857.80 an ounce on the New York Mercantile Exchange.

(Xinhua News Agency January 6, 2009)