Gold dips on strong dollar

LONDON, Nov 20 (Reuters): Gold prices slipped on Monday as the dollar rose, but prices still held near the one-month highs as political and economic uncertainty in the US dominated sentiment.

Spot gold was down 0.2 per cent at $1,291.60 an ounce at 1008 GMT, compared with Friday's peak of $1,297, its strongest since 16 October. US gold futures ceded 0.3 per cent to $1,292.10 an ounce.

The dollar gained against the euro after German chancellor Angela Merkel's efforts to form a three-way coalition government failed.

The prospect of higher US interest rates in December when the Federal Reserve meets was also helping the dollar against other major currencies such as the yen.

Higher rates typically mean sales of short-dated bonds, pushing up yields and make them cheaper for other investors.