LONDON: Gold hit a more than two-week low on Monday as expectations that Japan`s ultra-loose monetary policy would stay in place after Prime Minister Shinzo Abe`s election victory at the weekend lifted the dollar to a three-month high versus the yen.

Abe`s win also fed into positive sentiment in equity markets, already buoyed last week by optimism about tax cuts in the United States.

That helped push world stocks to another record high, curbing interest in gold as an alternative asset.

Spot gold was down 0.5 per cent at $1,274.03 an ounce by 1355 GMT, having touched its lowest since Oct 6 at $1,271.86. US gold futures for December delivery were $3.10 lower at $1,275.40. Themetal has fallen more than 6pc from mid-September`s 13-month peak of $1,357.54 an ounce. `When we went up above $1,350, there was fear in the market that the situation with North Korea would explode, and it didn`t, LBBW`s head of commodity research Frank Schallenberger said. `People don`t see that as much of an issue as they did a few weeks ago.

`We`ve also seen a comeback of the U.S. dollar,` he said.

`The more likely it is that we see more interest rate rises in the US, the less good it is for gold.

Among other precious met-als, silver was down 0.6pc to $16.90 an ounce, while platinum was 1 pc lower at $910.74 and palladium was down 1.4pc at $961.

-Reuters