LONDON. – Gold hit its lowest in a month yesterday, as the dollar firmed ahead of new US economic data and speeches by Federal Reserve officials that may signal more interest rate increases than anticipated. All eyes will be on Fed Chair Janet Yellen who speaks on the US economy and monetary policy today, with investors looking for further clues on the number and timing of rate hikes this year.
Spot gold was down 0,1 percent at $1,214.86 an ounce by 0903 GMT, after touching a session low of $1,208.15, its cheapest since February 23. The metal lost 3 percent last week, its biggest weekly loss since November on speculation that the next US rate increase could come as soon as next month.
Liquidity was thin as London and many other gold markets were closed for the Easter Monday holiday.
“Gold’s short-term technical trend has slightly deteriorated, with the $1,190-$1,200 level becoming a strong support area,” said Carlo Alberto de Casa, ActivTrades chief analyst.
Hawkish comments from several U.S. Federal Reserve officials last week put investors on guard for the possibility of at least two rates increases this year, triggering a widespread correction across commodities and bolstering the dollar, in which they are denominated.
“While we have stated that Fed tightening may not be as negative for gold as in previous tightening cycles, an April rate rise would likely knock gold lower near term,” HSBC said in a note.
Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, rose to its highest since December 2013 at 26,48 million ounces on Thursday, the latest available data shows. – Reuters.