Gold dips on firm dollar and rise in risk appetite

Gold slipped to its lowest in almost a month on Monday as a firm dollar and greater risk appetite outweighed support from an expected pause to increases in U.S. interest rates.

Spot gold was 0.1 percent down at $1,280.26 an ounce by 11:42 a.m. ET (1642 GMT), having touched its lowest since Dec. 28 at $1,276.31. U.S. gold futures were down 0.2 percent to $1,279.90.

"Some calm has been restored in the equities market ... We are seeing a bit of withdrawal of interest from the gold market," said Macquarie commodity strategist Matthew Turner.

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World markets showed some relief from Chinese economic data in line with expectations and offered some bright spots, though concerns about British Prime Minister Theresa May`s Brexit plans prompted some caution. [MKTS/GLOB]

U.S. markets were closed on Monday for a public holiday.

The dollar rise to a near two-week high weighed on gold, which has climbed more than 10 percent since mid-August, largely because of equity market turmoil and a weak dollar. [USD/]

ActivTrades chief analyst Carlo Alberto De Casa said a break through $1,277 could lead the gold price down to $1,260.

Analysts said gold was still finding some support from expectations that the U.S. Federal Reserve had reached the end of its monetary tightening, a slowdown in global economic conditions and geopolitical uncertainties.

Fed officials have left little doubt that they want to stop raising interest rates, at least for a while, before their first meeting of the new year over Jan. 29-30.

Higher rates tend to reduce appetite for non-yielding gold.

Holdings of SPDR Gold, the largest gold-based exchange-traded fund, rose 1.5 percent on Friday to 809.76 tonnes. [GOL/ETF]

Meanwhile, spot palladium, which hit a record high of $1,434.50 last week, driven by a sustained deficit, shed 1.4 percent to $1,357.50 an ounce.

"As a result of the strong rally over the last couple of months, the palladium market may see some consolidation before resuming its upward path," said Hans-Guenter Ritter, Global Head of Trading at Heraeus Metals, Germany.

Silver fell 0.2 percent to $15.29 an ounce while platinum lost 0.7 percent to $791.78.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)