LONDON: Gold slipped on Wednesday as the dollar strengthened and global shares clawed their way off two-month lows, though the precious metal was underpinned by the view that the dollar’s bear run remains in place despite rate hike expectations.

A stronger dollar makes dollar-priced gold costlier for non-US investors. Gold, seen as a safe haven asset, has failed to capitalise this week from the biggest selloff in six years in global equities, but the precious metal, still driven largely by dollar movement, is not poised to unwind.

Spot gold dipped 0.2 per cent to $1,322.74 per ounce, as of 1314 GMT. Prices fell over 1pc to hit their lowest since Jan. 11 at $1,319.96 on Tuesday. US gold futures for April delivery fell 0.3pc to $1,325.30 per ounce.

World stocks clawed their way back from two-month lows on Wednesday, though momentum was weak and US futures suggested Wall Street could lapse back into losses after rebounding from a rout that wiped $4 trillion off world equities.

Traders dialled back bets the US central bank would ratchet up the pace of rate increases on Monday to between two and three hikes from three to four hikes last week, according to interest rates futures. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.4pc to 829.27 tonnes on Tuesday from Monday. Holdings saw their worst one-day fall since December 2016.

Spot gold may test a support at $1,316 per ounce, as suggested by a retracement analysis and a head-and-shoulders, according to Reuters technical analyst Wang Tao.

Spot silver dipped 0.2pc to $16.58 per ounce. Platinum fell 0.9pc to $981 per ounce after touching its lowest since Dec 11 earlier. Palladium fell 1.3pc to $997.20 per ounce, having touched its lowest since Dec 7.

Published in Dawn, February 8th, 2018