By Brijesh Patel
(Reuters) - Gold dropped to a near one-month low on Tuesday to hold below the key $1,500 pivot, hit by a stronger dollar and an improved appetite for riskier assets supported by hopes of global economic stimulus.
Spot gold was down 0.3% at $1,494.04 per ounce as of 1126 GMT, after hitting its lowest level since Aug. 13, at $1,486, earlier in the session.
U.S. gold futures slipped 0.6% to $1,501.90 per ounce.
"More recently, we've had quite a broad improvement in risk appetite - the U.S. stock markets are now little shy away from record highs - that is taking some of the edge off gold," OANDA senior market analyst Craig Erlam said, adding a stronger dollar was also pressuring the metal.
Bullion prices have shed more than 4% or over $60 in less than a week, mainly hurt by a broader uptick in equity markets.
Also, the dollar rose 0.2% on Tuesday, making gold more expensive for investors holding other currencies.
"However, gold prices have primarily been supported by the central bank stimulus and the expectation is that we are going to see plenty more (interest rate cuts). So, from that perspective, we're still seeing gold at these higher levels," Erlam added.
Markets are looking out for Thursday's European Central Bank meeting, which is widely expected to deliver a cut to interest rates.
The U.S. Federal Reserve is also widely expected to cut rates next week as policymakers race to battle risks of a global downturn.
Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
"We now expect gold prices to trade stronger for longer, possibly breaching $2,000/oz and posting new cyclical highs at some point in the next year or two," Citi bank analysts wrote in a note.
On the technical front, spot gold is expected to fall to $1,453, as it has cleared a support at $1,497 per ounce, said Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.8% to 882.42 tonnes on Monday.
Among other precious metals, platinum dropped 0.6% to $940.24 per ounce, after nearing the $1,000 mark last week.
"Platinum has rallied the past two weeks as investors looked for 'cheaper' haven assets. While consolidation is likely in the near term, we remain bullish platinum over the next 12 months," Citi said.
Silver eased 0.1% to $17.94 per ounce, while palladium rose 0.5% to $1,551.26.
(Reporting by Brijesh Patel in Bengaluru; Editing by Pravin Char and Louise Heavens)