* Investors await ECB policy meeting on Thursday
* Gold could breach $2,000/oz in the next year or two -Citi
* Silver pops back up above $18
(Updates prices, adds market details)
By Sumita Layek
Sept 10 (Reuters) - Gold prices fell to their lowest level in
nearly a month on Tuesday, as rising bond yields and the dollar dented
the allure of safe-haven assets.
Spot gold was down 0.4% at $1,492.20 per ounce as of 1:44 p.m.
EDT (1744 GMT), having earlier hit its lowest level since Aug. 13, at
$1,486. U.S. gold futures settled 0.8% lower at $1,499.20 per ounce.
U.S. Treasury yields climbed to a multi-week peak, tracking German
bonds, as hopes of easing U.S.-China trade tensions and expectations
of fiscal stimulus measures by global central banks buoyed risk
"We're seeing safe haven liquidation in the market, there is
no reason for safe haven at the moment. Although equities are pulling
back today, they are showing some residual strength," said
Phillip Streible, senior commodities strategist at RJO Futures.
Bullion prices have shed more than 4%, or over $60, in less than
a week, mainly hurt by a broad uptick in equity markets.
Considering the large number of net long positions in gold,
"all those people who jumped into this party late are starting to
liquidate their positions right now. We're (also) seeing yields are up
a bit," Streible added.
Speculators increased their bullish positions in COMEX gold and
silver contracts in the week to Sept. 3, the U.S. Commodity Futures
Trading Commission said on Friday.
The dollar also rose, making gold more expensive for investors
holding other currencies.
However, analysts said gold's overall positive trajectory was
still intact, with the metal supported by lingering risks to global
economic growth and uncertainty surrounding U.S.-China trade.
Investors are now awaiting Thursday's European Central Bank
meeting, which is widely expected to deliver a cut to interest rates.
The U.S. Federal Reserve too is 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.
Elsewhere, platinum dropped 1.3% to $934.45 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 rose 0.9% to $18.12 per ounce and palladium
rose 0.9% to $1,557.92.
(Reporting by Sumita Layek and Diptendu Lahiri in Bengaluru Editing
by Steve Orlofsky and Matthew Lewis)
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