Gold Holds Near 9-Month Low, As Dollar Weighs

Gold held near 9-month lows on Wednesday, weighed down by broad-based strength in the dollar on growing expectations that the US Federal Reserve is set to tighten monetary policy before other major central banks. Other precious metals also languished, with platinum the biggest faller, sliding to a five-year low at $1 256.30 an ounce early in the session. Spot gold was at $1 209.20 an ounce at 11:27, little changed from late Tuesday, after earlier slipping to within 10 cents of the previous day�s 9-month low at $1 204.40. US gold futures for December delivery were down $1.90 an ounce at $1 290.70. �The weight of selling is such that I still see lower prices,� Societe Generale analyst Robin Bhar said. �We have the stronger dollar and investor disinterest, and if we drop below $1 200 or $1 180, you�ll get the short sellers moving in because momentum will be accelerating. �It�s difficult to see how things are going to reverse � there�s an old market saying, don�t catch a falling knife.� The dollar rose above �110 for the first time in six years and held near a two-year peak against the euro on Wednesday, as investors added to bets that US data will drive the Federal Reserve to tighten policy. A stronger dollar typically pressures assets priced in the US currency, such as commodities. Tightening monetary policy and the prospect of higher interest rates also raise the opportunity cost of holding non-yielding precious metals. Traders are awaiting Thursday�s European Central Bank meeting and key US payrolls data on Friday for further clues on the direction of monetary policy. Wednesday�s US ADP jobs data will be closely eyed ahead of that, analysts say.