Gold sank Tuesday to the lowest level since the shock Brexit referendum result, taking its cue from the strong dollar -- which climbed on the prospect of rising US interest rates.

The price of gold slid to $1,281.65 per ounce in afternoon London deals, its lowest level since June 24, one day after Britain's EU exit vote.

"The dollar is steadily regaining some momentum across the currency markets and if U.S. interest rate expectations increase over the upcoming days, we can expect further losses for gold," said analyst Jameel Ahmad at trading firm FXTM.

The rising greenback makes dollar-priced commodities more expensive for buyers using weaker currencies. In turn, that tends to weigh on demand and dent price levels.

In the aftermath of the Brexit vote, however, gold had forged two-year highs in early July as investors fled to the safety of the precious metal after Britain voted to leave the EU.

Gold is regarded by many investors as a safe store of value in times of economic or geopolitical turmoil.