Gold near 3-1/2-week low

Reuters

Bengaluru

Gold dipped on Tuesday to trade near a 3-1/2 week low hit in the previous session, pressured by expectations that the U.S. Federal Reserve will raise interest rates sooner rather than later.

The prospect of an early rate hike, as indicated by Fed meeting minutes released last week, and a strengthening dollar have pushed down bullion by 3.6 percent so far in May, on track for its biggest monthly decline since November.  Gold is sensitive to interest rates, gains in which raise the opportunity cost of holding non-yielding bullion.  Spot gold fell 0.3 percent to $1,244.71 per ounce by 0634 GMT.  The metal dropped to its lowest since April 28 at $1,242.63 an ounce.  U.S. gold futures eased 0.5 percent to $1,245.30 per ounce. "Over the next two weeks if the economy is on the firm side in the U.S. and the Fed is ready to move, maybe July at the earliest, then I would say gold is ready to see a correction," said analyst Dominic Schneider of UBS Wealth Management in Hong Kong.