LONDON: Gold fell on Tuesday to its lowest in nearly two months, weighed down by a stronger dollar, while investors awaited a set of key U.S. economic data and comments from Federal Reserve officials for further clarity on the interest rate trajectory.
Spot gold fell 0.9 per cent to US$2,597.91 per ounce by 0747 GMT, hitting its lowest since Sept. 20. U.S. gold futures fell 0.5 per cent to US$2,604.30.
"Gold has succumbed to the purple patch of the U.S. dollar in the aftermath of the election," said Tim Waterer, chief market analyst at KCM Trade.
"The President-elect's policies appear to be a boon for the dollar and potentially from an inflationary standpoint, it could slow down the Fed's rate-cutting trajectory in 2025."
The dollar surged while bitcoin extended its record rally, as investors continued to pile into trades seen as benefiting from the incoming Donald Trump administration.
Gold is also under pressure due to Trump's pro-bitcoin stance, which could act as an alternative safe haven to bullion, analysts at Berenberg said in a note.
"While we still expect the gold price to ease over 2025 and beyond, we do not expect a material negative correction," Berenberg said.
Gold is considered a hedge against inflation, but higher interest rates reduce its appeal.
Focus is on the October Consumer Price Index data on Wednesday, the Producer Price Index and weekly jobless claims on Thursday, and retail sales data on Friday.
Several Fed officials are also scheduled to speak this week, including Chair Jerome Powell.
"A soft inflation report would increase the odds of a December rate cut, which may give gold a reprieve," said Waterer.
Traders see a 65 per cent chance of a rate cut in December, versus around 80 per cent before Trump's victory, according to the CME FedWatch Tool.
Spot silver dipped 1.3 per cent to $30.28, platinum lost 1.2 per cent to $953.35 and palladium fell 1.4 per cent to US$967.31.