Gold hits one-week low

Gold slipped to a one-week low on Tuesday as investors sought the US dollar after weak data in China, although rising expectations for a pause in interest rate increases by the US Federal Reserve limited losses, reports Reuters.

Spot gold declined 0.4 per cent to $1,930.33 per ounce by 1126 GMT, eyeing its biggest daily drop since mid-August. US gold futures fell 0.6 per cent to $1,955.80.

Making gold more expensive for other currency holders, the dollar gained 0.5 per cent to a more than three-month high after data showed China's services activity expanded at the slowest pace in eight months in August.

However, the drop in the price of gold was limited by hopes that interest rate increases may be ending.

"The expectation for a dovish Fed in September is capping the downside for gold," said Carlo Alberto De Casa, market analyst at Kinesis Money.

Recent US economic data has backed bets of a soft landing as worries about inflation and recession have eased, cementing expectations that the Fed might not have to raise interest rates further.