Gold treads water ahead of Fed; platinum near 5-1/2 yr low

Singapore (Mar 17)  Gold prices hovered close to their lowest in over three months on Tuesday as traders waited for this week's Federal Reserve policy meeting to gauge the timing of a U.S. rate hike, while platinum stood near its lowest in 5-1/2 years.

Spot gold had edged up 0.1 percent to $1,154.96 an ounce by 0043 GMT, close to last week's levels of $1,147.10, the
lowest since Dec. 1.

Platinum, the worst-performing precious metal of the year, slid to a session low of $1,102.50, after falling to a July 2009 trough of $1,101 on Monday.
    Precious metals are hurting from the strength in the dollar,
which is trading at a near-12-year high against a basket of
major currencies.
    Expectations that the Fed would begin increasing interest
rates as soon as June on the back of a strong economy have
helped the dollar.
    The Fed begins its two-day policy meet on Tuesday, with the
markets awaiting clues on the timing of any move by the U.S.
central bank.
    Higher rates could dent demand for assets such as bullion
that don't pay any interest. A stronger greenback hurts gold's
safe-haven appeal, while also making it more expensive for
holders of other currencies.
    "We believe that the gold market will remain bearish for the
rest of the year in response to Fed rate hikes," Barclays
analysts said in a note.
    Platinum, dragged lower by a stronger dollar and weaker gold
prices, has also been hurt by lack of buying interest at the
lower price levels. It is down nearly 8 percent this year.
    The steep drop in prices of the white metal is failing to
generate significant new jewellery demand in the once reliably
price-sensitive Chinese market, analysts say.

Source: Reuters