Gold nears 9-month low as looming rate hikes lift dollar


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Gold neared a nine-month low on Monday,

weakening after strong U.S. job market data last week boosted

the likelihood of another super-sized interest rate hike by the

Federal Reserve.

Spot gold was down 0.3% at $1,736.63 per ounce by

1108 GMT. U.S. gold futures dipped 0.5% to $1,734.00.

Losses in gold were, however, limited by growing pessimism

over the state of some economies in Asia and geopolitical

instability, Evangelista said, adding that bullion remains the

go-to safe haven during times of trouble.

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Looking at the technical picture, next key levels for gold

can be found at $1,721.50 and $1,700, Otunuga said.

Benefiting from the rate-hike bets, the dollar rose

0.6% to approach a 20-year peak hit in the previous session,

dimming greenback-priced gold’s appeal among overseas buyers.

“Gold has stumbled into the new week struggling to nurse

deep wounds inflicted by an appreciating dollar and rising

Treasury yields,” said Lukman Otunuga, senior market analyst at

FXTM.

Rate hikes increase the opportunity cost of holding

non-yielding bullion. A strong labor market is considered an

indicator of a healthy economy and gives the central bank more

ammunition for another big hike, analysts said.

Atlanta Fed President Raphael Bostic said on Friday he

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“fully” supports another 75-basis point rate hike at the Fed’s

next policy meeting later this month.

Central banks in Canada and New Zealand are also expected to

tighten policy further this week.

Losses in gold were, however, limited by growing pessimism

over the state of some economies in Asia and geopolitical

instability, Evangelista said, adding that bullion remains the

go-to safe haven during times of trouble.

Among other precious metals, spot silver fell 0.4% to

$19.22 per ounce, platinum slipped 2.2% to $877.13 and

palladium dropped 2.1% to $2,136.60.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry

Jacob-Phillips and Aditya Soni)

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