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MTECHTIPS:-Gold holds near 3-month low on U.S. rate hike outlook
Gold held near a three-month low on Monday, amid growing expectations for higher interest rates in the U.S. as early as June. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery touched a session low of $1,166.30 a troy ounce before turning higher to trade at $1,172.70 during European morning hours, up $8.40, or 0.72%. Futures were likely to find support at $1,141.70, the low from December 1, and resistance at $1,200.00, the high from March 6. On Friday, gold plunged $31.90, or 2.67%, to end at $1,164.30 after hitting an intraday low of $1,162.90, a level not seen since December 1. The Labor Department reported that the U.S. economy added 295,000 jobs in February, far more than the 240,000 forecast by economists, while the unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008. The robust jobs report fuelled expectations that the Federal Reserve will start raising interest rates as early as June. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.3% to 97.45 early on Monday, after hitting an 11-year peak of 97.84 earlier.
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