By Frank Tang and Clara Denina
NEW YORK/LONDON (Reuters) - Gold prices fell below $1,250 an ounce on Tuesday, as technical selling and speculation that the U.S. Federal Reserve and other central banks would hike interest rates earlier than expected sent prices to a three-month low.
Other precious metals also tumbled along with gold, as platinum dropped to a seven-month low and silver slipped under $19.
Commodities were broadly under pressure as the dollar rose to a 14-month high against the euro on optimism the U.S. economy is growing in line with expectations that the U.S. central bank may begin raising interest rates next year.
More than 12,000 lots in the benchmark COMEX December contract changed hands in the 20 minutes after 12:00 p.m. (1600-1620 GMT), after a drop below $1,250 support triggered a bout of stop-loss orders, traders said.
"Some traders have given up on gold as the $1,250 level represents the line in the sand for many traders. Also, geopolitical risks also appeared to be fading for now," said Phillip Streible, senior commodities broker at RJO Futures in Chicago.
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Spot gold was down 0.5 percent at $1,249.34 an ounce by 2:22 p.m., having earlier reached a fresh three-month low at $1,247.15.
U.S. COMEX gold futures for December delivery settled down $5.80 an ounce at $1,248.50, with trading volume in line with its 30-day average, preliminary Reuters data.
Silver was down 0.5 percent at $18.89 an ounce.
Comments from Bank of England's Governor Mark Carney about possible rate hikes next spring and tighter credit supply by China's Premier Li Keqiang also weighed down on gold's inflation-hedge appeal.
Bright U.S. economic data has given the Fed a reason to raise interest rates, leaving gold speculators with no choice but to sell, said Robert Haworth, senior investment strategist at U.S. Bank Wealth Management's Private Client Reserve in Seattle.
Among other precious metals, palladium was down 0.8 percent to $860, having earlier hit a one-month low at $852.30. Palladium investors took profits after prices rallied to 13-year high earlier this month.
Platinum fell 0.8 percent to $1,379.75 an ounce, having reached a seven-month low at $1,376.60.
Russia is the world's largest producer of palladium. Worries about supplies from Russia have prompted some investors to favor palladium at the expense of platinum, said Thomas Capalbo, precious metals trader at brokerage Newedge.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Evans, David Gregorio and Marguerita Choy)