Gold prices fell to a near two-month low on Tuesday, weighed down by a stronger dollar, while hopes of progress in the US-China trade talks lifted equity markets in a further hit to bullion's appeal. Trading was thin in Asian hours as traders in top consumer China went for a long public holiday.
Spot gold was 0.8% lower at $1,459.91 per ounce, as of 0750 GMT, after declining to its lowest since Aug. 6 at $1,458.50 earlier in the session. US gold futures were 0.4% lower at $1,467.20 per ounce. The dollar's potential to gain further and some optimism around a potential trade deal between Washington and Beijing weighed on gold, said Michael McCarthy, chief market strategist at CMC Markets. "We also broke through the $1,480-$1,490 support level and on a technical basis that in itself is enough to spur further selling," he said. "Gold is likely to stay volatile ahead of the October trade talks," said Hareesh V, head of commodity research at Geojit Financial Services.
On the technical front, spot gold may break a support at $1,462 per ounce and fall towards $1,446, according to Reuters analyst Wang Tao. Indicative of investor sentiment, holdings at SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22% to 920.83 tonnes on Monday.
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