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Gold edges higher, but remains below $1,200

Published 01/02/2015, 02:53 AM
Updated 01/02/2015, 02:53 AM
Gold remains under pressure on U.S. rate hike expectations

Gold remains under pressure on U.S. rate hike expectations

Investing.com - Gold prices edged higher on Friday, but still remained below the $1,200 threshold as markets re-opened after the New Year Holiday and the broadly stronger dollar continued to weigh on demand for the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.16% to $1,186.00.

The February contract ended Wednesday's session 1.36% lower at $1,184.10 an ounce.

The dollar remained broadly supported as a recent string of upbeat U.S. data sparked optimism over the strength of the country's economic recovery and added to expectations for the Federal Reserve to soon raise interest rates.

Higher U.S. interest rates would boost the greenback and weigh on gold, which has benefited from central bank liquidity and a low interest rate environment since the 2008 financial crisis.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.38% to 90.99, the highest level since December 2005.

Separately, investors continued to focus on developments in Greece, where parliament was formally dissolved on Wednesday after Prime Minister Antonis Samaras failed earlier in the week to persuade lawmakers to back his candidate for head of state, casting the country's international bailout into doubt.

Parliamentary elections were set for January 25, almost 18 months before the current coalition's term was due to end.

Elsewhere in metals trading, silver for March delivery jumped 1.37% to $15.813 a troy ounce, while copper futures for March delivery rose 0.25% to $2.833 a pound.

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