New Delhi, Feb 8: Gold prices dropped for a third straight session on Thursday and hit a fresh four-week low, as investors liquidated their long positions on a firmer dollar, while expectations of more US rate hikes this year also weighed on the market.
Spot gold was down 0.4 percent at USD 1,312.41 per ounce as of 0755 GMT, after hitting its lowest since Jan. 10 at USD 1,309.51 earlier in the session. US gold futures for April delivery were nearly flat at USD 1,314.50 per ounce.
The dollar rose on Wednesday, marking its biggest one-day gain in more than three months against a basket of currencies. It was steady at 90.269 on Thursday.
“There was consistent selling on Comex… And offers above the USD 1,320 cash level were enough to prevent an advance,” said MKS PAMP Group trader Alex Thorndike.
“Spot gold slowly began to work its way lower with ongoing liquidation seen from managed money and leveraged clients – those who were still buying aggressively above USD 1,340.”
Asian shares flirted with six-week lows on Thursday, while U.S. stocks finished lower on Wednesday, losing ground late in the session as a jump in Treasury yields kept investor nervousness high.
The US Federal Reserve will stick to its plan for “steady, gradual” interest-rate increases, San Francisco Federal Reserve Bank President John Williams said on Wednesday despite market gyrations and strong data on U.S. wage growth that has bond traders pricing in faster rising inflation.