The increasing strength of the dollar has helped to drive down spot gold by more than 8 percent from its April high of $1,365.23. It was down 0.8 percent at$1,242.28, its weakest since early December.
U.S. gold futures for August delivery settled down $12.80 at $1,241.70.
• Fears of a trade war between the United States and China have helped to push China's renminbi to its weakest against the dollar in more than seven months.
The Indian rupee is also near a record low against the dollar, Japan's yen is at its weakest since mid-May while the value of the euro was eroded by the potential for a row over migration policy to fracture the German government.
• The dollar resumed its climb higher as traders increased their bets that the U.S. economy would fare better in a trade war than some of its trading peers ahead of U.S. tariffs on $34 billion worth of Chinese imported goods slated for July 6.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.58% to 94.78.
• Investors were looking ahead to the minutes of a June Federal Reserve meeting on Thursday and U.S. employment data on Friday, with an aggressive tone by the Fed or strong jobs numbers likely to be seen as bolstering the case for higher U.S. interest rates.
That could drive gold prices even lower because higher rates tend to strengthen the dollar and also boost bond yields, reducing the appeal of non-yielding bullion. On the technical side, support was at the psychological level of $1,250 and gold's December low of $1,236.60, ScotiaMocatta analysts said.
Technical indicators suggest that gold could fall further, they added.
• Gold broke to a new 2018 low as it reached $1,243.90 a troy ounce.
Gold is likely set to remain under pressure as Gold is in a strong bear trend. It is trading below its 50, 100 and 200-period simple moving average.
The 1,245.65 level former 2018 low becomes now the new intraday resistance while to the downside bears need to overcome 1,243.92 December 7, 2017 low to target1,236.52 December 12, 2017 swing low.
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