Gold slips on strong dollar ahead of US jobs data

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Published Mar 8, 2017

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London - Gold prices hit a four-week low

on Wednesday as the dollar gathered strength on the prospect of

a US interest rate hike.

Investors are awaiting February non-farm payrolls data on

Friday as a barometer of the US economy after Federal Reserve

Chair Janet Yellen said last week that the central bank was

poised to lift rates provided jobs and inflation data held up.

These comments were seen as cementing plans for an increase

at the Fed's March 14-15 meeting.

Spot gold fell 0.26 percent to $1 212.45 per ounce at

1040 GMT, after touching its lowest since February 3 at $1,210.92,

putting it on track for its fifth straight session in the red.

"Non-farm payrolls ... will provide final confirmation of a

rate hike next week and this could put more pressure on gold,"

Julius Baer commodities analyst Carsten Menke said.

"Higher rates tend to put pressure on gold prices because

they raise the opportunity cost of holding non-yielding bullion

while boosting the dollar, in which it is priced.

Gold could dip below $1 200 before Friday's data," Menke

said.

The dollar index, which pits the greenback against

six major currencies, inched up 0.1 percent.

On the other hand, ETF Securities' Martin Arnold said he

expected the backdrop of political risk in France and a lack of

policy certainty in the US to create support for gold prices

as the interest rate increase was already priced in.

"And if the Fed doesn't follow up their tough talk with

action then its certainly a bullish environment for gold,"

Arnold said, referring to expectations of three rate hikes this

year.

In other precious metals, silver edged down by 0.7

percent to $17.37 per ounce, after earlier touching $17.34, its

lowest since February 6.

Platinum inched 0.2 percent lower to $958.30 per

ounce. The metal hit its lowest since January 20 at $954 in the

previous session.

Palladium eased 0.7 percent, to $766.80 per ounce. 

REUTERS

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