Gold prices went lower Tuesday after two sessions of gains, with the U.S. dollar strengthening amid speculation the Federal Reserve will raise U.S. interest rates in December. Spot gold had dropped 0.1 percent to $1,258.01 an ounce by 0336 GMT. U.S. gold futures were steady at $1,260.10 an ounce. Bullion had risen for two consecutive sessions after touching a four-month low of $1,241.20 on Friday. Spot gold ended last week about 4.5-percent lower, its biggest weekly decline since November 2015. "After the drastic drop, the optimistic mood in gold markets has reduced," said Jiang Shu, chief analyst at Shandong Gold Group. "Gold prices will be in further decline due to a rise in the U.S. dollar." The dollar index, which measures the greenback against a basket of six major currencies, was up 0.2 percent at 97.109. The metal is highly-sensitive to U.S. interest rates, increases in which lift the opportunity cost of holding non-yielding gold while boosting the dollar, in which it is priced. Traders have priced in a 70-percent chance that the Fed will hike rates at a Dec. 13-14 meeting, up from 66 percent early Friday, according to CME Group's FedWatch tool. Investors are also waiting for Wednesday's release of minutes of the latest Federal Reserve Open Market Committee meeting to see how close the central bank was to hiking rates last month. "Recent equity strength and general risk-on sentiment has dampened short-term appetite for the metal," MKS Group trader James Gardiner wrote in a note. Asian shares were mixed in early Asian trading on Tuesday after oil prices surged to a one-year high and as optimism over Hillary Clinton's widening lead in the U.S. presidential election campaign pushed Wall Street higher. Spot gold may revisit its Oct. 7 low of $1,241.20 per ounce, as its bounce from this level could have completed, according to Reuters technical analyst Wang Tao. Among other precious metals, silver was unchanged at $17.63 an ounce. Platinum inched up 0.2 percent to $962.60 an ounce and palladium shed 0.1 percent to $664.65. Source: Reuters
