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Gold on Tuesday traded firmly below $1,200 an ounce as the dollar was perched at a near nine-year high versus a basket of major currencies, undermining the metal’s appeal as a hedge.
Spot gold was little changed at $1,182.40 an ounce by 0019 GMT, after losing 1 per cent on Monday.
Dollar vs euro
The US dollar hit fresh highs against the euro on Monday, while the dollar index, which measures the greenback against a basket of six major currencies, hit its highest since April 2006.
Also hurting gold was stronger equities. Shares edged higher in major markets on Monday, while crude oil prices tumbled after a short-lived bounce.
The US benchmark S&P 500 closed at a record high.
Greece election
Greek Prime Minister Antonis Samaras failed to get enough support for his presidential nominee and will call a national election for January 25. Stocks in Athens plunged, while yields on 10-year Greek bonds touched their highest since September 2013.
The news failed to trigger enough safe-haven bids for gold to offset the strength in the dollar.
Bullion trading volumes were thin due to the Christmas and year-end holidays.
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