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MTECHTIPS:-Gold struggles near 3-month low amid stronger dollar
Gold held near the lowest level in more than three months on Wednesday, as the U.S. dollar resumed its rally amid growing expectations for higher interest rates in the U.S. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery tacked on $1.10, or 0.09%, to trade at $1,161.20 a troy ounce during European morning hours. Prices held in a tight range between $1,160.40 and $1,164.30. A day earlier, gold fell to $1,153.80, a level not seen since December 1, before ending at $1,160.10, down $6.40, or 0.55%. Futures were likely to find support at $1,141.70, the low from December 1, and resistance at $1,174.40, the high from March 9. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit 98.97 on Wednesday, the most since April 2003, and was last at 98.91, up 0.3%. A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. The euro was at 12-year lows against the greenback, pressured lower by the diverging monetary policy stance between the Federal Reserve and the European Central Bank. Demand for the dollar continued to be underpinned after last week’s stronger-than-forecast nonfarm payrolls report for February solidified expectations for higher interest rates. The Fed is expected to begin raising interest rates around the middle of this year and investors were looking ahead to next week’s policy statement to see if it would drop its reference to being patient before raising rates.
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