Gold falls 1% on firmer dollar, thin Asia trade

Gold fell 1% on Tuesday as thin trading persisted across major Asian markets due to the Lunar New Year holidays, while a firmer dollar also pressured prices.

FUNDAMENTALS

Spot gold <XAU=> dropped 0.9% to $4,947.98 per ounce by 0110 GMT, after losing 1% earlier in the session.

U.S. gold futures <GCcv1> for April delivery lost 1.6% to $4,966.80 per ounce.

The U.S. dollar index <.DXY> rose 0.2% against a basket of currencies, making greenback-priced bullion more expensive for holders of other currencies. [USD/]

Mainland Chinese, Hong Kong, Singapore, Taiwan and South Korea markets are closed for the Lunar New Year holidays. U.S markets were shut on Monday on account of Presidents' Day.

Markets currently expect three 25-basis-point interest rate cuts by the U.S. Federal Reserve this year, per CME's FedWatch Tool. Non-yielding bullion tends to do well in low-interest-rate environments. FEDWATCH

Elsewhere, U.S. President Donald Trump said on Monday that he would be involved "indirectly" in talks between Iran and the U.S. over Tehran's nuclear programme set for Tuesday in Geneva, adding he believed Tehran wanted to make a deal.

Meanwhile, Iran's foreign minister met with the U.N. nuclear watchdog chief on Monday, ahead of talks between Washington and Tehran aimed at resolving a nuclear dispute, with few clear signs of compromise from either side and the threat of U.S. military action looming.

Spot silver <XAG=> fell 2.7% to $74.51 per ounce, after dropping over 3% earlier.

Spot platinum <XPT=> shed 0.8% to $2,025.05 per ounce, while palladium <XPD=> lost 1.5% to $1,698.10.

-Ishaan Arora/Reuters