MTECHTIPS;-Gold futures struggle near 11-month lows as firm dollar

MTECHTIPS;-Gold futures struggle near 11-month lows as firm dollar weighs

MTECHTIPS- Gold prices struggled near last week’s 11-month lows on Wednesday, as a firm U.S. dollar and the possibility of further U.S. interest rate hikes next year continued to weigh. Gold for February delivery on the Comex division of the New York Mercantile Exchange inched up $1.75, or 0.15%, to $1,135.35 a troy ounce by 4:10 AM ET (09:10 GMT), after falling $9.10, or 0.8%, in the prior session. Prices of the yellow metal sank to $1,124.30 last week, a level not seen since February 2. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 103.21 in early trade. The index climbed to 103.62 on Tuesday, the strongest level since December 2002. Since the U.S. election in early November, the dollar index has risen nearly 6% thanks to bets of higher U.S. growth and a faster pace of interest rate increases under incoming president Donald Trump. A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. Market analysts warned that the outlook for gold remains cloudy in the near-term, given expectations for higher U.S. interest rates in the months ahead.

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