Gold fell in London as a stronger dollar curbed demand for the metal as an alternative investment and as bullion's climb to a four-week high prompted some investors to lock in gains.
Gold for immediate delivery lost $6.55, or 0.6 per cent, to $1,125.35 an ounce. The metal reached $1,133.40 an ounce on Monday. Bullion for June delivery was 0.7 per cent lower at $1,126.20 on the Comex in New York.
Gold is up 2.6 per cent this year after advancing 24 per cent in 2009 as the dollar weakened and central banks and governments maintained low borrowing costs and spent trillions of dollars to stimulate economies. Gold reached a record 841.36 euros yesterday.
The dollar gained against the euro for a third day amid concern European countries including Greece will struggle to raise funds. Gold, which climbed on Monday to the highest price since March 8, typically moves inversely to the US currency.
Gold is "lower as a result of dollar strength," said James Moore, an analyst at TheBullionDesk.com in London. Precious metals may consolidate after "profit taking" following holidays at the weekend, he said.
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