Investing.com - Gold futures extended losses on Tuesday, slumping to more than two month lows as the broadly stronger dollar dampened investor demand for the precious metal.
Gold for December delivery touched lows of $1,266.00, the weakest since June 18 and was last down 1.39% to $1,269.50 an ounce on the Comex division of the New York Mercantile Exchange.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, hit highs of 83.02 on Tuesday, the strongest level since July 2013.
The euro fell to fresh one year lows against the dollar amid mounting expectations that the European Central Bank will announce quantitative easing measures as a way to shore up long term inflation expectations in the euro area.
Concerns that sanctions against Russia would act as a drag on growth in the euro zone also weighed on the single currency.
The dollar rose to seven month highs against the yen and 10-month peaks against the Swiss franc, bolstered by weakness in the euro.
The stronger dollar outweighed safe haven demand for the precious metal stemming from heightened tensions between Russia and Ukraine.
Investors were looking ahead to the latest U.S. employment report, due for release on Friday, for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.
Elsewhere in metals trading, palladium prices were sharply lower, with Nymex palladium for December delivery dropping 2.3% to $888.6 an ounce, off Monday’s thirteen-and-a-half year highs of $913.00.
Palladium, which is used in auto catalysts, has rallied in recent sessions amid concerns that more far reaching sanctions against Russia, the world's largest palladium producer, could hit supplies.
Meanwhile, silver for December delivery was down 1.25% to trade at $19.24 an ounce, while copper for December delivery slid 0.24% to $3.152 a pound.