Singapore: Gold prices hovered close to their lowest in over three months on Tuesday as traders waited for this week`s Federal Reserve policy meeting to gauge the timing of an U.S. rate hike, while platinum stood near its lowest in 5-1/2 years.
Spot gold had edged up 0.1 percent to $1,154.96 an ounce by 0043 GMT, close to last week`s levels of $1,147.10, the lowest since Dec. 1.
Platinum, the worst performing precious metal of the year, slumped over 3 percent to a session low of $1,102.50, after falling to a July 2009 trough of $1,101 on Monday.
Precious metals are hurting from the strength in the dollar, which is trading at a near-12-year high against a basket of major currencies.
Expectations that the Fed would begin increasing interest rates as soon as June on the back of a strong economy have helped the dollar.
The Fed begins its two-day policy meet on Tuesday, with the markets awaiting clues on the timing of any move by the U.S. central bank.
Higher rates could dent demand for assets such as bullion that don`t pay any interest. A stronger greenback hurts gold`s safe-haven appeal, while also making it more expensive for holders of other currencies.
"We believe that the gold market will remain bearish for the rest of the year in response to Fed rate hikes," Barclays analysts said in a note.
Platinum, dragged lower by a stronger dollar and weaker gold prices, has also been hurt by lack of buying interest at the lower price levels. It is down nearly 8 percent this year.
The steep drop in prices of the white metal is failing to generate significant new jewellery demand in the once reliably price-sensitive Chinese market, analysts say.
