Gold traded near a three-month low on speculation that the price decline will encourage purchases as investors assessed the strength of the U.S. economy and the outlook for higher borrowing costs.
Bullion for immediate delivery rose and fell 0.1 percent before trading at $1,256.69 an ounce by 11:51 a.m. in Singapore from $1,255.47 yesterday, Bloomberg generic pricing show. The metal dropped to $1,247.60 yesterday, the lowest since June 6, as the Bloomberg Dollar Spot Index climbed to a 14-month high. The 14-day relative-strength index, or RSI, for gold reached a three-month low of 33.42 on Sept. 8. The level of 30 suggests to some investors that prices may be poised to rebound.
Data this week may show U.S. retail sales rose the most in four months in August and first-time applications for unemployment benefits fell in the week to September 6, backing the case for the Federal Reserve to increase interest rates for the first time since 2006. The Fed, which has held the benchmark rate near zero since 2008, next meets September 16-17.
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