Gold slipped to its lowest level in more than seven weeks, as the dollar continued to strengthen following Donald Trump's election victory last week.

Bullion fell as much as 1.1% — after sliding 2.5% in the previous session — as a gauge of the dollar rose to its highest level in a year. The gains, which make commodities priced in the currency more expensive for most buyers, are linked to Trump's pledges to cut taxes and impose trade tariffs.

The precious metal has declined about 5.5% since last week's election, as hedge funds unwound bullish wagers and exchange-traded fund flows turned less supportive amid a widespread rotation into US equities. The sell-down is also "partly technical" after a break below the 50-day moving average led funds to cover long positions, according to Pepperstone Group Ltd. Head of Research Chris Weston. 

Bullion is still up more than 25% this year, supported by the Federal Reserve's easing cycle, central bank purchases and heightened geopolitical and economic risks that drove haven demand.

Investors will look to Wednesday's core consumer price index report, which excludes food and energy, for clues on the Fed's next steps after the US central bank cut rates by 25 basis points last week. Many economists see the inflationary impact of Trump's policies leading to fewer rate cuts than previously expected. Lower borrowing costs tend to benefit gold, which doesn't pay interest.

Spot gold declined 0.9% to $2,595.79 an ounce as of 10:13 a.m. in London, about 7% below the record high reached last month. The Bloomberg Dollar Spot Index rallied for a third consecutive day. Silver, palladium and platinum fell.

Source : Bloomberg