Gold prices ease as investors look to riskier assets

Gold prices hit their lowest in over a week on Tuesday, extending losses from the previous session as investor appetite for riskier assets such as equities began to pick up.

Asian shares marked a 10-year peak early in the day and the dollar held gains, with investors breathing a sigh of relief as fears over North Korea eased slightly and the worst-case scenario from Hurricane Irma looked to have been avoided.

Spot gold had edged 0.2-percent lower to $1,324.80 an ounce by 0330 GMT, after earlier touching its lowest since Sept. 1.

The metal lost 1.4 percent in the previous session, its biggest one-day percentage decline since early July.

U.S. gold futures for December delivery were down 0.5 percent at $1,329.40 an ounce.

"Relief selling in gold was seen overnight, as Hurricane Irma is downgraded to a tropical storm, amid little adverse news from the geopolitical arena," said OCBC analyst Barnabas Gan.

Irma had ranked as one of the most powerful Atlantic hurricanes on record. It was downgraded to a tropical storm on Monday after wreaking havoc across Florida.

Fears over North Korea receded slightly after the nation marked its founding day without further nuclear tests.

The United Nations Security Council unanimously stepped up sanctions against North Korea on Monday over the country`s sixth and most powerful nuclear test on Sept. 3, imposing a ban on the country`s textile exports and capping imports of crude oil.

"We suspect that the dollar rally could have more room to run ... we could see a retracement in the precious metal to around $1,310-$1,315 before an element of underlying support sets in," INTL FCStone analyst Edward Meir said in a note.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Spot gold may drop to $1,317 per ounce, as it has broken support at $1,332, said Reuters technical analyst Wang Tao.

Meanwhile, holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, climbed 0.14 percent to 835.68 tonnes on Monday.

In other precious metals, silver prices fell 0.3 percent to $17.74 an ounce, while platinum was down 0.5 percent at $985.05.

Palladium was 0.1-percent higher at $933.00 an ounce.

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