Gold prices dropped for a third straight session on Thursday and hit a fresh four-week low, as investors liquidated their long positions on a firmer dollar, while expectations of more US rate hikes this year also weighed on the market. Spot gold was down 0.4 percent at $1,312.41 per ounce as of 0755 GMT, after hitting its lowest since Jan. 10 at $1,309.51 earlier in the session.
US gold futures for April delivery were nearly flat at $1,314.50 per ounce. The dollar rose on Wednesday, marking its biggest one-day gain in more than three months against a basket of currencies. It was steady at 90.269 on Thursday. "There was consistent selling on Comex... And offers above the $1,320 cash level were enough to prevent an advance," said MKS PAMP Group trader Alex Thorndike.
"The shifting Fed narrative that is gathering hawkish following could be the most significant thorn in the gold bulls side," said Stephen Innes, head of trading APAC at OANDA. Spot gold is expected to fall more to $1,301 as it has pierced below a support at $1,316 per ounce, according to Reuters technical analyst Wang Tao.
Holdings at SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), dropped 0.29 percent to 826.90 tonnes on Wednesday from 829.27 tonnes on Tuesday.
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