Gold on 4-month low

LONDON. — Gold prices hovered near fourmonth lows yesterday and the dollar held firm on expectations of tighter US monetary policy as the market awaited a speech from Federal Reserve Chair Janet Yellen this week.

Spot gold was down 0,2 percent at $1 212,09 an ounce at 1346 GMT, near Monday’s $1 204,45, its lowest since March 15. US gold futures slipped 0,2 percent to $1 211,10 an ounce. A higher US currency makes dollar-denominated commodities more expensive for holders of other currencies, which could subdue demand.

“The recent drop in gold to a large extent reflects the market pricing in additional tightening from central banks,” Danske Bank analyst Jens Pederson said.

“But we are at the lower end of the range for gold prices . . . It could be a buying opportunity if tensions with North Korea escalate.”

Gold prices are down more than 6 percent from a seven-month high near $1 300 hit in June. Perceptions that an era of ultra-cheap money is gradually ending have been reinforced by European Central Bank minutes showing policymakers are open to reducing monetary stimulus. The Bank of Canada is expected to raise rates today. Yellen delivers a semi-annual monetary policy testimony to lawmakers at 1400 GMT today and tomorrow.

The dollar rose against the basket of currencies used to measure its broader strength, hitting a four-month high against the yen on the past fortnight’s 25-basis-point rise in 10-year US government bond yields.