Nov 4 (Reuters) - Gold prices fell below $4,000 per ounce on Tuesday as the dollar hit three-month highs, while traders awaited U.S. economic data for clues on the U.S. Federal Reserve's policy path.
Spot gold lost 0.8% to $3,968.09, as of 09:04 a.m. ET (1404 GMT). U.S. gold futures for December delivery eased 0.9% to $3,979.20.
The dollar index (.DXY), opens new tab traded at three-month highs, making gold more expensive for other currency holders.
"With the dollar making new highs, we're seeing that having a weight on the gold market... some of this recent strength in dollar and the weight in the gold market comes from the less likelihood of a potential rate cut in December," said David Meger, director of metals trading at High Ridge Futures.
Although the Fed cut rates last week, Chair Jerome Powell suggested that might be the last cut of the year. Traders now see a 71% chance of a rate cut in December, compared with more than 90% a week earlier, CME FedWatch showed.
Non-yielding gold thrives in a low-interest-rate environment and during times of economic uncertainty.
With the U.S. government shutdown likely to become the longest ever, halting the release of government data, investors are watching non-official reports, including Wednesday's ADP National Employment data.
Remarks from Fed officials have highlighted differing perspectives over how to address the current data gap.
Bullion, which has gained 53% this year, has dropped by more than 9% from a record high hit on October 20.
"Gold is losing some froth, while still pricing in concerns over Fed independence and the possibility of stagflation as well as underlying geopolitical risk and international tensions. Some of the froth has been blown off in a much-needed correction," StoneX analyst Rhona O'Connell said in a note.
Elsewhere, spot silver was down 1.3% at $47.47 per ounce, platinum eased 1.2% to $1,547.09 and palladium fell 3.5% to $1,394.75.
Reporting by Noel John and Pablo Sinha in Bengaluru; Editing by Alexander Smith
