By Frank Tang and Clara Denina
NEW YORK/LONDON (Reuters) - Gold prices fell below $1,250 an ounce on Tuesday, as technical selling sent prices to a three-month low as the U.S. dollar rose and investors worried that the Federal Reserve and other central banks would hike interest rates earlier than expected
Gold's drop and the dollar's rally also weighed heavily on other precious metals, sending silver below $19 and platinum prices to a seven-month low.
The U.S. currency rose for a fourth session, hitting a 14-month high against the euro on optimism the U.S. economy is growing in line with expectations that the Federal Reserve may begin raising interest rates next year.
More than 12,000 lots in the benchmark COMEX December contract changed hands in the 20 minutes between 12-12:20 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.
Also Read
Spot gold was down 0.5 percent at $1,249.70 an ounce by 12:27 p.m., having earlier reached a fresh three-month low at $1,247.45.
A dollar rally also sent gold prices down 1 percent on Monday.
U.S. COMEX gold futures for December delivery were down $3.80 an ounce at $1,250.50.
Among other precious metals, palladium was down 2 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 $1,380.23 an ounce, having reached a seven-month low at $1,376.60. Silver was down 0.2 percent at $18.95 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Evans and David Gregorio)