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Gold prices ease on outlook for U.S. rate hikes


By N R

(Reuters) - Gold prices inched down on Tuesday amid expectations for more U.S. hikes this year.

Spot gold was down 0.2 percent at $1,317.86 an ounce by 0655 GMT. Last week, prices touched their strongest since Sept. 15 at $1,325.86.

U.S. gold futures were down 0.1 percent at $1,318.80 an ounce.

The dollar hit a more than one-week high against a basket of other major currencies on Monday. It was steady at $92.342 on Tuesday

Investors are betting on further U.S. hikes after Friday's payrolls data did nothing to challenge the outlook for monetary policy tightening by the

Raphael Bostic, who is a voting member of the central bank's policy board, said on Monday that two hikes might be needed in 2018, in light of weak price pressures.

"Gold will be under pressure (in the short term) as the dollar will strengthen on U.S. tax reforms and expectations," said Ji Ming, at

"However, the market will get used to the expectations soon and the dollar will lose its strength, pushing gold higher," Ming added.

"We can expect prices to go past 2017 highs in the second half of 2018."

Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Spot gold may test resistance at $1,329 per ounce, as suggested by a Fibonacci retracement analysis and a triangle, according to

"Gold should see resistance at the recent low of $1,315 and the psychological $1,300 level below that," said

"On the upside, a break above last week's high of $1,324 could see the make a move on the September top of $1,355."

Among other metals, spot silver fell 0.3 percent to $17.08 an ounce.

dropped 0.8 percent to $964.35, after hitting a 3-1/2 month peak on Monday at $973.60.

Palladium was up 0.7 percent at $1,108.22, after marking a record high at $1,111.40 an ounce.

(Reporting by in Bengaluru; Editing by Joseph Radford)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 13:06 IST