BENGALURU, Oct 31 (Reuters) – Gold slid to its lowest in nearly three weeks on Wednesday as the dollar jumped and stock markets regained momentum after a spate of heavy losses, but the metal remained on track for its biggest monthly gain since January. Gold is set to end a six-month run of losses in October, the longest such streak since a period from August 1996 to January 1997, as it heads for a more than 2 percent gain this month on intense stock market volatility. Spot gold was down 0.5 percent at $1,215.96 an ounce at 1306 GMT, having touched its lowest since Oct. 11 at $1,214.07. U.S. gold futures fell 0.6 percent to $1,217.50. Analysts said they saw a stronger dollar ahead and predicted gold could struggle to continue its October rally. “The dollar index looks like it’s going higher and there is uncertainty related to the mid-term elections next week,” said Alasdair Macleod, head of research at “If there are signs that the Republicans are going to do well, this will probably lead to yet more dollar strength.” The mid-term elections on Nov. 6 will determine whether the Republican or Democratic party controls the U.S. Congress. The dollar index climbed to a 16-month high while the yuan fell to its weakest level against the dollar since May 2008. “The dollar versus the emerging market currencies, especially the Chinese yuan, is something the market is looking at. The depreciating yuan is the key reason why gold has been weak,” said Julius Baer analyst Carsten Menke. “Gold benefited quite a lot from the equity market jitters we had in the past week or so. Now the equity markets are calming a bit and trying to build a bottom at these lows, which is also negative for gold.” European shares were helped by positive momentum in global stock markets, bringing some relief after a brutal October in which equities suffered one of their worst drops in a decade and spooked investor confidence. Gold has fallen by about 11 percent since April, hit by rising U.S. interest rates and a global trade war that threatens economic growth, prompting investors to rush to the safety of the dollar. “As long as inflation doesn’t become a real threat or equities plunge much further from current levels, many investors will prefer yielding instruments than investing in gold, and that’s what the dollar is providing,” said Hussein Sayed, Chief Market Strategist at FXTM. “Gold is likely to trade within a narrow range of $1,200 to $1,250 until new factors emerge … It needs a bigger trigger to see another rally similar to the one since the beginning of the month.” In other precious metals, silver fell 1.3 percent to $14.26 an ounce, having slipped as low as $14.22, its weakest since Oct. 11. Platinum was down 0.1 percent at $832 while palladium jumped 1.1 percent to $1,084.90.

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