LONDON, Aug 12: The price of gold hit the lowest point for seven and a half months on Tuesday as the precious metal was rocked by the strong US currency and weakening crude oil prices, analysts said.

On the London Bullion Market, the price of gold tumbled as low as $802.34 per ounce. That was the lowest point since December 21, 2007.

Gold, which is used in jewellery, dentistry and electronics, has now shed almost one quarter of its value since striking a record high of $1,032.70 on March 17.

“In the short term, gold prices are likely to continue to take their lead from dollar movements and oil prices,” said Barclays Capital analysts in a note to clients.

A stronger US currency tends to reduce demand for dollar-priced goods, like gold and oil, which become more expensive for buyers holding weaker currencies.

At the same time, gold is regarded by investors as a sound defence against inflation, which in many countries is driven by soaring crude prices.

Meanwhile, gold has failed to gain ground this week despite the ongoing military conflict between Georgia and Russia. The precious metal is normally seen as a safe-haven in times of global unrest.

“The lack of bullish reaction by traditional safe-haven assets to the clash between Russian and Georgian forces suggests the need for cash to cover losses in other sectors will continue to outweigh geopolitical tensions in the short-term,” added TheBullionDesk.com analyst James Moore.—AFP