Gold rises as dollar drops, breaks four-day drop

Gold rose on Tuesday, snapping a four-session losing streak, boosted by a drop in the dollar index and expectations of Asian physical demand following bullion's tumble to a four-year low.The yellow metal was supported as the dollar dropped against the euro on a report citing internal tensions within the European Central Bank over the leadership style of its chief, Mario Draghi, that has the markets expecting limits on future loosening of monetary policy.So far, bullion demand from the price-sensitive Chinese and Indian markets, the world's biggest gold buyers, were only modest. However, gold's drop below a key chart level of around USD 1,180 an ounce should trigger more interest in the near term, dealers said."We expect that greater emerging-market demand would accompany further price declines," said James Steel, chief metals analyst at HSBC.Spot gold was up 0.3 percent at USD 1,167.75 an ounce by 2:09 p.m. EDT (1809 GMT), while US  COMEX gold futures for December delivery settled down USD 2.10 at USD 1,167.70.Analysts say investors are seeking downside protection through gold options. Comex data showed open interest in USD 1,075 December put options, which give the buyer the option to sell at that price, has surged by more than 3,500 lots in the past two sessions.From a technical perspective, analysts flag up a band of chart support for gold between USD 1,155 an ounce, the 61.8 percent retracement of gold's rally from its 2008 lows to its 2011 record high at USD 1,920.30, and USD 1,180.Elsewhere, the top gold exchange-traded fund, SPDR Gold Shares, posted a very small inflow of 0.01 tonnes on Monday, its first uptick since Oct. 16. Holdings are still close to a six-year low of 741 tonnes hit last week.Among other precious metals, silver was down 0.6 percent at USD 16.01 an ounce.Spot platinum was down 0.9 percent at USD 1,221.99 an ounce, while spot palladium dropped 1.7 percent to USD 785.50 an ounce.