BENGALURU - Gold prices fell to a more than two-week low on Wednesday as equities gained and the dollar touched multi-month highs after upbeat economic data indicated a robust U.S. economy.
The yellow metal, however, remained on track to end a run of six straight monthly losses, the longest such streak since early 1997.
Spot gold was 0.5 percent lower at $1,216.85 an ounce at 0750 GMT, having touched its lowest since Oct. 12 at $1,215.35 earlier in the session. It has risen more than 2 percent so far in October, the biggest monthly gain since January.
U.S. gold futures fell 0.5 percent to $1,218.7 an ounce.
"Gains in dollar is impacting dollar-denominated gold negatively," said Hareesh V, head of commodity research at Geojit Financial Services in the southern Indian city of Kochi.
"After robust recent economic data, the U.S. non-farm payroll data is also expected to be positive ... So possibly dollar strengthening might continue for the next couple of days."
The greenback on Wednesday scaled 16-month highs versus its key rivals on continued strength in the U.S. economy.
Gold prices have slipped about 11 percent from their April peak as investors turned to the dollar as a safe-haven with the trade war unfolding against a backdrop of higher U.S. interest rates.
A stronger dollar makes dollar-denominated bullion more expensive for users of other currencies while higher interest rates reduce the attraction of non-yielding gold.
"As long as inflation doesn't become a real threat or equities plunge much further from current levels, many investors will prefer yielding instruments than investing in gold, and that's what the dollar is providing," said Hussein Sayed, Chief Market Strategist at FXTM.
"Gold is likely to trade within a narrow range of $1,200 – $1,250, until new factors emerge ... It needs a bigger trigger to see another rally similar to the one seen since the beginning of the month," Sayed added.
Spot gold may break a support at $1,217 per ounce and fall to the next support at $1,208, as suggested by a retracement analysis, said Reuters technical analyst Wang Tao.
Meanwhile, Asian stocks clawed up from 20-month lows but investor confidence was brittle after equity markets bled trillions of dollars in a grim October.
The market is also awaiting the verdict of next week's U.S. mid-term elections for a direction, analysts said.
The midterm elections, on Nov. 6, will determine whether the Republican or Democratic party controls the U.S. Congress.
Among other precious metals, silver was down 0.6 percent at $14.35 per ounce after falling to an over two-week low of $14.31 earlier in the day.
Platinum fell 0.3 percent to $829.95 per ounce and palladium rose 0.1 percent to $1,074.20.