Gold Hit The Lowest Level

Gold hit the lowest level in more than four weeks on Tuesday as the dollar strengthened and expectations for a U.S. interest rate hike this month weighed, though moves were muted ahead of U.S. payroll data this week. 

The precious metal has fallen in five out of the last six sessions as expectations for the Federal Reserve to push ahead with a U.S. rate increase this month ramped up. The metal slipped last week after comments from U.S. Federal Reserve Chair Janet Yellen that the Fed was poised to lift benchmark U.S. rates were seen as cementing plans for an increase at the Fed's March 14-15 meeting. 

Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced. The dollar and U.S. Treasury yields rose Tuesday after data showed the U.S. trade deficit grew in January to its widest monthly level in nearly five years. Investors are now awaiting non-farm payrolls data.

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Suhani Verma

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