LONDON, Dec 4: Gold fell to its lowest in nearly a month on Tuesday on technically driven selling after prices broke below key support levels, with oil prices also drifting lower as investors worried about stalled US budget talks.

Gold broke below $1,710 an ounce and subsequently $1,705 in Asian trade, chart levels it had held since early November, which triggered stop-loss selling, traders said. It bounced off support at $1,698 an ounce to return to its lower support level.

Spot gold was down 0.67 per cent at $1,703.31 at 1300 GMT, while most-active US futures contract were down 0.94pc at $1,705.00, having earlier dropped as much as 1.3pc to a near one-month low of $1,698.50.

“Gold is off with some other risk assets such as commodities,” Peter Fertig, a consultant with Quantitative Commodity Research, said. “Some investors are taking a 'risk off' approach, and this led to some technical stops, which triggered further selling.”

Brent crude oil slipped towards $110 a barrel as weak manufacturing data and protracted negotiations over the so-called US “fiscal cliff” fanned concerns about the health of the global economy and the prospects for energy demand. The fiscal cliff, $600 billion of US tax hikes and spending cuts to kick off in early 2013, threatens to push the world's biggest economy into a recession.—Reuters