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Gold Tumbles Amid Dollar Strength

Gold prices fell about 2 percent on Tuesday, while equities rose and the dollar maintained its gains to hover near a one-week high against the euro after investor sentiment in Germany improved more than expected in August and data showed auto sales in China rose for the fourth straight month.

Spot gold fell over 2 percent to $1,986.35 per ounce, moving further away from a record high of $2,072.50 hit last week. U.S. gold futures were down 1.7 percent at $1,996.30.

China's auto market grew for a fourth straight month, driven by strong stimulus from the government and a robust recovery in demand for commercial vehicles, the China Association of Automobile Manufacturers said in a report.

Sales in China rose by an annual 16.4 percent in July in a sign of sustained recovery for the industry's biggest global market as Beijing eases restrictions and offers favorable policies and subsidies in a bid to revive the economy.

German economic confidence improved notably in August, survey data from the ZEW - Leibniz Centre for European Economic Research showed.

The ZEW Indicator of Economic Sentiment increased unexpectedly to 71.5 in August from 59.3 in July. The score was forecast to fall to 58.0.

Meanwhile, investors remain hopeful that U.S. Republicans and Democrats will eventually agree a comprehensive stimulus package to limit the economic damage caused by the coronavirus pandemic and boost growth.

U.S. congressional leaders and officials in President Donald Trump's administration said on Monday they were ready to resume coronavirus aid talks.

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