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Gold holds near three month low on US rate expectations

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Reuters SINGAPORE
Last Updated : Mar 10 2015 | 6:42 AM IST

SINGAPORE (Reuters) - Gold was stuck near three-month lows on Tuesday on renewed expectations of a mid-year hike in U.S. interest rates and as the dollar scaled a fresh 11-year peak.

FUNDAMENTALS

* Spot gold was little changed at $1,166.26 an ounce by 0040 GMT, close to a three-month low of $1,163.45 reached on Friday.

* Gold took a hit from Friday's strong U.S. nonfarm payrolls data that boosted expectations the Federal Reserve would begin increasing interest rates in June.

* Higher interest rates could dent demand for assets that do not pay interest such as gold, and boost the dollar.

* The greenback climbed to its highest since September 2003 against a basket of major currencies, denting bullion's appeal as a safe haven.

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* Investor positioning indicated bearishness in the market. Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.43 percent to 753.04 tonnes on Monday - their lowest in more than a month.

* Traders were also eyeing talks over the Greek debt crisis, where prolonged uncertainty could help safe-haven bullion.

* Finance experts from Greece will open talks about economic reforms on Wednesday with officials from the European Union, the ECB and the International Monetary Fund.

* The ECB's Governing Council is set to hold a teleconference on Thursday to discuss extending emergency liquidity assistance for Greek banks.

* For the top stories on metals and other news, click [TOP/MTL] or [GOL/]

MARKET NEWS

* The U.S. dollar held near multi-year highs on the yen and euro on Tuesday amid starkly different outlooks for global interest rates, while Asian investors braced for more economic news from China. [MKTS/GLOB]

DATA/EVENTS (GMT)

0130 China Consumer prices Feb

0130 China Producer prices Feb

1300 U.S. NFIB business optimism Feb

1400 U.S. Wholesale inventories Jan

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)

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First Published: Mar 10 2015 | 6:19 AM IST

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