Gold fell more than 1 percent on Tuesday, underperforming equities and other commodities, as heavy fund liquidation and options-related selling sent bullion prices below a key technical support. The metal hit its lowest price in nearly a month after breaking below its 100-day moving average around $1,700 an ounce, a level the metal had held since mid-August.
Economic uncertainty related to US budget talks and waves of heavy selling after last week's option expirations also pressured bullion, traders said. Open interest, a gauge of market activity, has fallen 10 percent since hitting a 14-month high of nearly 500,000 lots on November 23. The market has now fallen in five of the last seven sessions.
Spot gold fell as low as $1,690.64 an ounce and was down 1.2 percent at $1,694.44 by 2:22 pm EST (1922 GMT). Most-active US COMEX futures contract for February delivery settled down $25.30 at $1,695.80, with trading volume in line with its 30-day average, preliminary Reuters data showed. Spot silver dropped 2.1 percent to $32.90. Platinum was down 1 percent at $1,584.24 an ounce, while palladium, which has risen for the past five weeks, fell 0.9 percent to $679.50.