Gold stuck near three-month low as dollar strength weighs
Gold hovered near its lowest in over three months on Wednesday, hurt by consecutive losses in the last seven sessions as a robust dollar and expectations of higher U.S. interest rates curbed appetite for the metal.
Spot gold had ticked up slightly to $1,162.85 an ounce by 0314 GMT, after dropping 4 percent in the seven sessions to Tuesday. The metal slumped to $1,155.60 in the previous session, its lowest since Dec. 1.
Bullion has taken a hit from stronger-than-expected U.S. nonfarm payrolls data on Friday that renewed expectations the Federal Reserve would begin to increase interest rates in June.
Higher rates could dent demand for assets that do not pay interest such as gold, and boost the dollar, which was trading at its highest in over 11 years against a basket of major currencies.
"The possibility of further dollar gains is weighing on gold but Asian demand is emerging and may lend support for prices," said HSBC analyst James Steel.
A robust dollar tends to dent the yellow metal's safe-haven appeal, while also making it more expensive for holders of other currencies.
However, the drop in gold to multi-month lows has attracted some bargain hunters in Asia, the top bullion consuming region.
In China, the metal was traded at a premium of about $5 an ounce more than the global benchmark, an indication of good buying interest.
Sustained physical buying could provide a floor for falling gold prices.
Another factor that could support prices is further weakness in global equity markets that could boost safe-haven bids.
Asian stocks fell to a two-month low on Wednesday as nervous markets recoiled on worries about an earlier U.S. interest rate hike, while the S&P 500 posted its worst decline in two months overnight.
Other precious metals have also taken a hit along with gold.
Platinum slumped to its lowest since July 2009 on Tuesday, while silver fell to a two-month low in the same session, though both the metals were a tad firmer on Wednesday.
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