Gold below $1,300 on stronger dollar, interest rate fears
By A. Ananthalakshmi
SINGAPORE (Reuters) – Gold steadied after two days of losses on Wednesday but held below $1,300 an ounce, near a four-week low, on a stronger dollar and fears that the Federal Reserve could hike U.S. interest rates sooner than expected.
Spot gold had gained 0.3 percent to $1,297.94 an ounce by 0629 GMT, after losing 3.3 percent in the last two sessions – the metal's biggest two-day loss since October.
"Prices will see some range-trading now and could consolidate at $1,280-90."
Fung said prices in Hong Kong were either on par with the global benchmark, or slightly lower, due to weak demand.
The bigger concern in the market is still about U.S. interest rates, with a hike likely to encourage investors to withdraw money from non-interest-bearing assets such as gold.
George said by many measures, including a recent rise in rent and food prices, and strong hiring reports, the Fed should have already lifted interest rates from the zero level.
"Despite Yellen defending the Fed's stance to maintain loose monetary policies, the bullion markets seemed to interpret her comments for the possibility of an earlier than an anticipated rate hike as gold-bearish," HSBC analysts said in a note.
"With the break below $1,300/oz and technical weakness, further losses for gold are likely."