Gold prices inched down on Tuesday, January 9, amid expectations for more US interest rate hikes this year.
Spot gold was down 0.2 per cent at $1,317.86 an ounce by 0655 GMT. Last week, prices touched their strongest since Sept. 15 at $1,325.86. US gold futures were down 0.1 per cent at $1,318.80 an ounce.
Investors are betting on further US interest rate hikes after Friday’s payrolls data did nothing to challenge the outlook for monetary policy tightening by the US Federal Reserve, Economic Times reports.
“Gold will be under pressure (in the short term) as the dollar will strengthen on US tax reforms and rate hike expectations,” said Ji Ming, chief analyst at Shandong Gold Group.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Spot gold may test resistance at $1,329 per ounce, as suggested by a Fibonacci retracement analysis and a triangle, according to Reuters technical analyst Wang Tao.
“Gold should see resistance at the recent low of $1,315 and the psychological $1,300 level below that,” said MKS PAMP Group trader Tim Brown.
