NEW YORK/LONDON, April 14 Gold fell more than 1 percent on Thursday, as the dollar rose for the third day and world stocks climbed to 2016 highs, with uncertainty over the outlook for U.S. monetary policy this year adding to volatility.
Spot gold was down 1.3 percent at $1,226.06 an ounce at 2:32 p.m. EDT (1832 GMT). U.S. gold futures for June delivery settled down 1.7 percent at $1,226.50. The metal has steadied after its biggest quarterly rise in nearly 30 years, driven by a retreat in expectations that the U.S. Federal Reserve will push ahead with several rate hikes this year.
Gold is sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding assets, while boosting the dollar. Atlanta Fed President Dennis Lockhart said a potential British exit from the European Union would be a “big event” although it should not “stop the music” on a potential interest rate hike in June.
“Traders are not willing to accept that the Fed will not be raising the rates anytime soon,” Naeem Aslam, chief market strategist at Ava Trade, said. “Most of the bad news is factored into the dollar and it appears they cannot push the greenback any further.
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