Investing.com - Gold futures fell to their lowest level in a week on Tuesday, pressured by a broadly stronger dollar which offset safe haven demand for the precious metal stemming from heightened tensions between Russia and Ukraine.
Gold for December delivery touched lows of $1,275.60 and was last down 0.71% to $1,278.30 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 82.95 on Tuesday, the strongest level since July 2013.
The euro was at its lowest level in a year against the dollar amid mounting expectations that the European Central Bank will implement fresh 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.
Over the weekend European Union leaders threatened to impose a new round of sanctions on Russia if Moscow does not scale back its involvement in the conflict in eastern Ukraine.
The dollar rose to seven month highs against the yen on Tuesday, boosted by weakness in the euro and by gains in Asian equities markets overnight, which curbed investor demand for the safe haven yen.
A stronger dollar makes gold more expensive for buyers who use other currencies as the metal is traded in dollars.
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 eased but remained close to thirteen-and-a-half year highs, amid concerns that more far reaching sanctions against Russia, the world's largest palladium producer, could hit supplies.
Nymex Palladium for December delivery slipped 0.35% to $906.40 an ounce, off Monday’s highs of $913.00.
Meanwhile, silver for December delivery lost 0.28% to trade at $19.44 an ounce, while copper for December delivery was little changed at $3.158 a pound.