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MTECHTIPS:-Gold trades near $1,150 on U.S. rate hike expectations
Gold traded at the lowest level in more than three months on Wednesday, as the U.S. dollar rallied amid expectations for higher interest rates in the U.S. as early as June. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery dipped $1.50, or 0.13%, to trade at $1,158.60 a troy ounce during U.S. morning hours. Prices held in a tight range between $1,155.80 and $1,164.30. A day earlier, gold fell to $1,153.80, a level not seen since December 1, before settling 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. Meanwhile, silver futures for May delivery shed 5.1 cents, or 0.33%, to trade at $15.58 a troy ounce after hitting an intraday low of $15.51, also the weakest level since December 1. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit 99.50 on Wednesday, the most since April 2003, and was last at 99.35, up 0.75%. Dollar strength 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 dollar remained broadly supported after the latest U.S. jobs report heightened expectations for higher interest rates. The Federal Reserve 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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