Gold near 1-month low on concerns over US rate rises

Gold steadied in early Asian trade on Tuesday, but was just off a one-month low after tumbling about 2 per cent in the previous session as hedge funds sold down amid expectations of higher US interest rates.

FUNDAMENTALS

Spot gold added $1.49 an ounce to $1,310.61 by 2357 GMT, having fallen to $1,307.54 an ounce on Monday, its weakest since February 20.

US gold was steady at $1,311.50 an ounce.

Some gold investors have turned bearish after comments last week from Federal Reserve chief Janet Yellen suggested interest rates could rise sooner than many in markets had expected, hurting the metal's appeal as a hedge against inflation.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.6 per cent to 821.47 tonnes on Monday from 816.97 tonnes on Friday.

US President Barack Obama and major industrialised allies warned Russia on Monday it faced damaging economic sanctions if President Vladimir Putin takes further action to destabilise Ukraine following the seizure of Crimea.

MARKET NEWS

The US dollar nursed broad losses early on Tuesday, having come under pressure late in New York as investors bought the euro and drove the Australian dollar to its highest this year.

Brent crude oil fell and US crude edged slightly higher in choppy trading on Monday as lackluster manufacturing data from the world's largest oil consumer was balanced by supply concerns over the Ukraine crisis and turmoil in Libya.

Copyright: Thomson Reuters 2014