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Gold stuck near 3-month low as dollar strength weighs

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Gold hovered near its lowest in over three months on Wednesday, hurt by consecutive losses in the last seven sessions as a robust dollar and expectations of higher US interest rates curbed appetite for the metal.

[SINGAPORE] Gold hovered near its lowest in over three months on Wednesday, hurt by consecutive losses in the last seven sessions as a robust dollar and expectations of higher US interest rates curbed appetite for the metal.

Spot gold had ticked up slightly to US$1,163.15 an ounce by 0042 GMT, after dropping 4 percent in the seven sessions to Tuesday.

The metal slumped to US$1,155.60 in the previous session, its lowest since Dec 1.

Bullion has taken a hit from stronger-than-expected US nonfarm payrolls data that renewed expectations the Federal Reserve would begin to increase interest rates in June.

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

The US dollar hit a near 12-year peak against the euro and touched its highest level against the Japanese yen in nearly eight years on Tuesday, buoyed by the European Central Bank's bond-buying programme, as well as expectations for a mid-year rate hike.

The dollar index, which measures the greenback against a basket of major currencies, hit its highest since September 2003.

Other precious metals have also taken a hit along with gold. Platinum slumped to its lowest since July 2009 on Tuesday, while silver fell to a two-month low in the same session.

US-based gold miner Allied Nevada Gold Corp filed for bankruptcy protection on Tuesday, buckling under a heavy debt load amid weaker metal prices.

Venezuela's central bank is in talks with Wall Street banks to create a gold swap that would allow it to monetize some US$1.5 billion of the metal held as international reserves, according to government sources familiar with the operation.

The platinum market is expected to be in deficit of 235,000 ounces this year, a report by the World Platinum Investment Council estimated on Wednesday, down 66 per cent from 2014 levels, on stronger mining and recycling supply growth.

The benchmark S&P 500 stock index tumbled to close at its lowest in more than a month on Tuesday. Concerns over Greece added to the bearish mood on Wall Street, as technical negotiations intended to prevent Greece going bankrupt will start on Wednesday.

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