Investing.com - Gold struggled to hold onto gains Friday, despite renewed political uncertainty in Europe and a dip in optimism surrounding a U.S. March rate hike.
Gold futures reached a session high of $1244.95 in European mid-day trade, buoyed by political uncertainty in France, after a report suggested that the two main left-leaning candidates in France’s presidential election, Benoit Hamon and Jean-Luc Melechon are considering the possibility of joining forces.
Gold pared gains soon after, as the US Dollar Index Futures snapped a two-day losing streak, hitting a session high 100.90 at 11:45 ET.
The yellow-metal had been under pressure throughout the week against the backdrop of a spike in optimism of a March rate hike, after Federal Reserve Chair Janet Yellen struck hawkish tone in a two-day testimony to congress.
Ms. Yellen said that it would be “unwise” to keep US interest rates lower for longer and suggested that the US economy was “coming closer to achieving Fed mandates”. However, optimism for a rate hike has since waned – According to Investing.com's Fed Rate Monitor Tool less than 15% of traders expect the Fed to raise interest rates at its next meeting in March, compared to a 22% likelihood of a March rate hike a day earlier on Thursday.
Gold for April delivery on the Comex division of the New York Mercantile Exchange traded down 0.18% or $2.35 at $1238.45 a troy ounce.
A firmer U.S. dollar continued to weigh heavily on commodities across the board.
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