Gold prices inched down early on Tuesday as the dollar held steady amid expectations of more U.S. interest rate hikes this year. Spot gold had slipped 0.3 percent to $1,317.06 an ounce by 0110 GMT. Last week, prices touched their highest since Sept. 15 at $1,325.86. U.S. gold futures were down 0.2 percent at $1,318.10 an ounce. The dollar index, which tracks the greenback against a basket of six major rival currencies, was steady on the day at 92.337. Underpinning the dollar, investors bet on further U.S. interest rate hikes after Friday's payrolls data did nothing to challenge the outlook for monetary policy tightening by the U.S. Federal Reserve. While job growth slowed more than expected, a pickup in monthly wages pointed to labor market strength. Atlanta Fed President Raphael Bostic, who is a voting member of the central bank's policy board, said on Monday that two hikes might be needed in 2018, in light of weak price pressures. However, San Francisco Fed President John Williams said the Fed could better fight a recession by committing to keep interest rates lower for longer to keep average inflation on a steady upward path over the years, a framework known as price level targeting. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. CME on Monday lowered its margins for COMEX 100 gold futures margins and COMEX 5000 silver futures. Colombia raised gold holdings by 2.240 tonnes to 8.933 tonnes in November, 2017, IMF data showed. BofA Merrill on Monday kept its third quarter 2018 average gold price forecast at $1,350 an ounce. Asian shares edged higher on Tuesday, approaching record highs after the S&P 500 extended its winning streak. Source: Reuters
