* China eases policy on concerns spat with U.S. could hurt growth
* Speculators cut net short position in COMEX gold in Oct. 2 week
* European markets down after China equities sell-off
* Gold unable to break strong resistance at $1,210 -analyst (Updates prices, adds quote)
By Sethuraman N R
BENGALURU, Oct 8 (Reuters) - Gold fell more than 1 percent alongside sliding equities on Monday as investors sought refuge in the dollar, which has been boosted by a run of strong U.S. economic data reinforcing expectations of further interest rate rises.
Spot gold was down 1.1 percent at $1,189.37 an ounce at 1220 GMT. U.S. gold futures fell 1.1 percent to $1,192.30 an ounce.
“The strong U.S. dollar and expectations of more interest rate hikes are pushing gold down and kind of scaring gold investors,” said Carlo Alberto De Casa, chief analyst at ActivTrades.
“Investors are not sure about buying gold as it is unable to break above $1,210, a strong resistance.”
Gold has fallen more than 12 percent from a peak in April largely due to the dollar’s strength, which reflects a vibrant U.S. economy, rising U.S. interest rates and fears of a global trade war.
A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies.
Global equity markets tumbled as investor confidence took a knock from last week’s spike in U.S. Treasury yields and concerns about the U.S.-China trade dispute.
The nervous mood was aggravated as China’s central bank on Sunday cut the level of cash that banks must hold as reserves, in a move aimed at lowering financing costs.
The U.S. unemployment rate fell to near a 49-year low, a government report showed on Friday, the latest in a string of positive data that could prompt the Federal Reserve to maintain a path of gradual interest rate increases.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Despite the losses, gold has held in a $34 range for the last 1-1/2 months, which some analysts say suggests resilience due to safe-haven bids spurred by worries over the damage to emerging market economies from higher U.S. interest rates.
“Weakness in emerging markets might bring in small bids for gold,” said Nicholas Cawley, an analyst at DailyFX.com, adding that the “overriding factor is higher U.S. interest rates and bond yields”.
Meanwhile, speculators cut their net short position in COMEX gold by 4,186 contracts to 73,128 in the week to Oct. 2.
Spot silver fell by 1.2 percent to $14.41 and palladium declined 0.7 percent to $1,061.47. Platinum was down 1 percent at $812.90 an ounce. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Dale Hudson and Jane Merriman)