Gold hits more than six-month low as dollar recover

NEW YORK, June 26 (Reuters): Gold hit its lowest in more than six months on Tuesday as a sell off in global risk assets eased and the precious metal remained under pressure from the prospect that rising US interest rates will further support the dollar.

Modest gains from Europe's main bourses relieved nervy investors on Tuesday, after the latest escalation in an increasingly global trade storm pummelled Wall Street and sent China into bear market territory.

Rising equities, seen as risky assets, tend to weigh on gold, seen as a safe haven.

The dollar strengthened on growing concerns about an intensifying conflict between the United States and its trade partners, particularly China. A stronger dollar makes dollar-priced gold costlier for non-US investors.

"The dollar (has been) a lot stronger, that's the main driver here. Also, gold hasn't seemed to benefit from the (trade) turmoil, so I imagine that's made some longs throw in the towel," said Matthew Turner, commodities strategist at Macquarie.

Spot gold was down 0.6 per cent at $1,256.45 an ounce, as of 1019 GMT, having hit its weakest since mid-December.

US gold futures for August delivery were 0.8 per cent lower at $1,258.40 per ounce.