Gold closed above a three-week low on Thursday, following its biggest drop in over a month, as the dollar rose following strong U.S. housing data that stoked expectations the Federal Reserve could raise interest rates soon.
Spot gold was up 0.8 percent at $1,197 an ounce, after touching its lowest since April 1 at $1,183.65. The metal fell 1.3 percent on Wednesday, its biggest single-day decline since March 6, pressured by a stronger dollar after U.S. home resales surged to their highest level in 18 months in March.
U.S. gold futures for June delivery closed up $7.40 at $1,194.30 an ounce. “On the one hand, you are seeing some geopolitical support, limiting any downside, on the other the U.S. interest rates story supports the dollar,” Citi strategist David Wilson said.