MTECHTIPS:-Gold ticks higher in positive start to 2017

MTECHTIPS:-Gold ticks higher in positive start to 2017

Gold prices ticked higher in the first trading session of 2017 on Tuesday, but gains were limited as the prospect of rising U.S. interest rates this year kept sentiment bearish. Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $2.00, or around 0.2%, to $1,153.75 a troy ounce by 3:50 AM ET (08:50 GMT). The U.S. dollar rose on Tuesday, crawling back toward its 14-year-high against a basket of currencies with markets focused on the possibility of further U.S. interest rate hikes in 2017. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.55% at 102.93 in early trade, not far from last week’s 14-year peak of 103.62. Market analysts warned that the outlook for gold remains cloudy in the near-term amid expectations of U.S. interest rates rising more rapidly during the incoming Trump Administration. The Federal Reserve hiked interest rates for the first time in a year last month and projected three more increases in 2017. Prices of the yellow metal have fallen sharply since Donald Trump was elected president as a soaring U.S. dollar, rising Treasury yields and a record-breaking rally on Wall Street have dampened its appeal. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

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