Gold prices fell below $4,000 an ounce again in trading on Tuesday, affected by the strength of the US dollar and the continued decline in expectations of an interest rate cut in December, in addition to the easing of trade tensions between America and China, which reduced the appeal of the precious metal as a safe haven.

Gold fell 0.6% in spot trading to $3,974.87 an ounce.

Meanwhile, US futures contracts for December delivery fell 0.8% to $3,982.20 an ounce.

The dollar index held near its highest level in more than three months, after divisions within the US Federal Reserve led to a reduction in investor bets on a further interest rate cut.

Tim Waterer, senior market analyst at KCM Trade, told Reuters that the strength of the dollar is a thorn in gold's side, as traders reassess the likelihood of an interest rate cut before the end of the year.

The Federal Reserve cut interest rates last week for the second time this year, but its chairman, Jerome Powell, stressed that another cut in 2025 was “not a given.”

According to the CME Group's FedWatch tool, markets are currently pricing in a 65% probability of another interest rate cut in December, down from over 90% before Powell's remarks.

Gold typically benefits from low interest rate environments and periods of economic uncertainty, as it does not generate returns.

Investors are closely watching key US economic data this week, most notably the ADP employment report, for fresh clues about the direction of monetary policy. “If the employment data disappoints, it could give gold a chance to rebound,” said Waterer.

Despite its recent decline, gold is still up about 53% since the beginning of the year, but it has fallen by more than 8% from its historic peak recorded on October 20.

US President Donald Trump announced last week that he had agreed to reduce tariffs on China in exchange for concessions from Beijing.

As for other precious metals, silver rose 0.1% in spot trading to $48.12 an ounce, platinum increased by the same percentage to $1,566.60, while palladium fell 1% to $1,430.31 an ounce.