Zimpapers Logo

SINGAPORE. – Gold was stuck near three-month lows yesterday on the renewed expectation of a mid-year hike in US interest rates and as the dollar scaled a fresh 11-year peak. Spot gold was little changed at $1 166,66 per ounce by 2.53am GMT, close to a three-month low of $1 163,45 reached on Friday. Gold took a hit from Friday’s strong US non-farm payrolls data that boosted the expectation the US Federal Reserve would begin increasing interest rates by the middle of the year.

The Fed, which has kept rates at near zero since December 2008, has signalled that it is prepared to raise rates later this year, with June to September the expected time frame.

Higher rates could dent demand for assets that do not pay interest such as gold, and boost the dollar, which on Tuesday climbed to its highest since September 2003 against a basket of major currencies, denting bullion’s safe-haven appeal.

“Gold will continue to be weighed down near term by the strong US payrolls from Friday,” said ANZ analyst Victor Thianpiriya.

Comments from a top Fed official added to worry over a rate hike. Dallas Federal Reserve Bank president Richard Fisher said the US central bank should promptly end its easy monetary policy and press ahead with an interest rate hike.

Charts were also not in favour of gold, with technical analysts predicting the next support level for gold at $1 150. -Reuters.