MTECHTIPS:-Gold sinks as March rate hike talk boosts dollar to 7-week

MTECHTIPS:-Gold sinks as March rate hike talk boosts dollar to 7-week high

MTECHTIPS-Gold prices were down sharply during North American morning hours on Wednesday, falling toward a one-week low as the dollar surged amid indications the Federal Reserve is preparing to raise interest rates later this month. Comex gold futures lost $12.25, or about 1%, to $1,241.75 a troy ounce by 8:45 AM ET (13:45 GMT), after touching a daily low of $1,240.00. Spot gold was down $6.90 to $1,241.40 per ounce. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up around 0.6% at 101.91 in New York morning trade. It rose to 101.98 earlier, its strongest level since January 11. Treasury yields shot up, with the U.S. 10-Year bond up around 10 basis points at 2.460%, after reaching a daily peak of 2.463%, the highest since February 22. Expectations for a March U.S. interest rate hike mounted after influential New York Fed President William Dudley said that the case for tightening monetary policy “has become a lot more compelling”. Meanwhile, San Francisco Fed President John Williams said that a rate increase was very much on the table for serious consideration at the March meeting. Fed fund futures priced in about a 70% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. Odds of a May increase was seen at 74%, while June odds were at around 85%. More clues on interest rate hikes ahead of the central bank’s March 14-15 meeting are expected to come Wednesday, when Fed Governor Lela Birdbrain speaks at 6:0 0 PM ET (23:00 GMT). Comments from Fed Chair Janet Yellen at the end of the week will also be in focus. The Fed chief is scheduled to speak on monetary policy on Friday afternoon in Chicago

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