Gold slides

LONDON. — Gold slid to a six-week low yesterday as the dollar strengthened ahead of a US Federal Reserve policy meeting this week, which is being watched for clues on the future pace of interest rate hikes.

The metal also looks vulnerable after breaking through key chart support in the $1,320/1,317 area, its 100-day moving average and a key retracement of its January to March decline, technical analysts said.

Spot gold was down 0,4 percent at $1,309.41 an ounce at 0950 GMT, off an earlier low of $1,307.81, its weakest since March 20. US gold futures for June delivery were 0,7 percent lower at $1,310.20.

The dollar hit a 3-1/2-month high versus the euro ahead of the Fed meeting starting yesterday and moved into positive territory for the year against a basket of major currencies, having surged on a recent rally in bond yields.

“Investors are buying dollars and this is adding pressure on gold. (The)dollar index jumped above 92, while markets are seeing growing chances for a fourth hike in 2018. Almost 50 percent of traders (are) expecting a fourth raise by the end of the year,” ActivTrades analyst Carlo Alberto de Casa said.

While the US central bank is widely expected to stand pat on policy for now, market participants will be closely watching the two-day meet for hints of an interest rate hike in June. Rising interest rates tend to weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.