Gold near three-week lows as firmer dollar dents safe-haven appeal

Spot gold fell 0.1 percent at $1,278.77 per ounce by 0546 GMT, after touching its lowest since Dec. 28 at $1,276.31 on Monday

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BENGALURU: Gold prices edged lower on Tuesday, hovering near a three-week low touched in the previous session, as a firmer dollar made bullion more expensive for buyers using other currencies, even as concerns about a global slowdown mounted.

Spot gold fell 0.1 percent at $1,278.77 per ounce by 0546 GMT, after touching its lowest since Dec. 28 at $1,276.31 on Monday. U.S. gold futures fell 0.3 percent to $1,278.70 per ounce.

The dollar hovered near 2-week highs against its peers on Tuesday.

The dollar’s rise weighed on gold, which has climbed more than 10 percent since mid-August, largely because of equity market turmoil and a weak dollar.

A weaker Chinese economic data also supported the U.S. dollar.

China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest level in nearly three decades, data showed on Monday.

Asian shares slipped on Tuesday on pessimism about world growth after the International Monetary Fund trimmed its global growth forecasts. However, this did not influence gold prices.

Fed officials have left little doubt that they want to stop raising interest rates, at least for a while.

Higher interest rates tend to reduce appetite for non-yielding gold.

Spot gold may fall to $1,268, as it has broken a support at $1,279 per ounce, according to Reuters technical analyst Wang Tao.

Meanwhile, spot palladium, which hit a record high of $1,434.50 last week driven by a sustained deficit and rising demand, stood firm at $1,362.50 an ounce.

Silver fell 0.1 percent to $15.21 an ounce while platinum was down 0.2 percent at $789.50.

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