Gold drops on firmer dollar as March rate hike bets rise

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Gold prices fell on Thursday, pressured by a stronger dollar on rising expectations of a U.S. rate hike in March, but losses were muted as investors remained friendly to bullion as a hedge against global uncertainty and rising inflation.

 

 

Spot Gold fell 0.5 % to $1,243.20 per ounce by 1100 GMT. On Monday, the metal rose to $1,263.80, its highest since Nov. 11.Spot gold may retest a resistance at $1,252, a break above which could lead to a gain to the next resistance at $1,258, according to Reuters technical analyst Wang Tao.

U.S. gold futures fell 0.5 % to $1,243.80.

U.S. inflation recorded its biggest monthly increase in four years on Wednesday while euro zone inflation surged to 2.0 percent last month, data showed on Thursday, shooting past the central bank's target.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.28 percent to 843.54 tonnes on Wednesday from 841.17 tonnes on Tuesday.