Off The Wire
PRECIOUS-Gold falls to 1-month low as dollar soars
* Specs trim net short positions in gold in week to Nov. 6
* Dollar index hits over 16-month peak
* GRAPHIC-2018 asset returns: (Updates prices) By Sumita Layek Nov 12 (Reuters) - Gold fell for a seventh straight session on Monday, hitting its lowest in a month as the dollar jumped to 16-month highs on the back of political uncertainty in Europe and the U.S. Federal Reserve's hawkish stance on interest rates. Spot gold fell 0.3 percent to $1,206.22 per ounce at 1254 GMT, having touched a one-month low of $1,203.36 earlier in the session. U.S. gold futures edged 0.1 percent lower to $1,207.9 per ounce.
"The main driver has been some renewed dollar strengthening... due to political uncertainty in UK and Italy," said Saxo Bank analyst Ole Hansen. "Gold is facing a bit of an uphill struggle due to the dollar strength."
The metal posted its biggest weekly drop since August last week after the Fed reaffirmed its monetary tightening stance, seen as a negative for non-yielding bullion. The dollar index , which measures the greenback against a basket of six major currencies, was up 0.5 percent on Monday. The currency benefited from a broader move away from riskier assets due to U.S.-Sino trade tensions, China's economic slowdown, Brexit uncertainty, and the standoff between Rome and the European Union over Italy's budget plan.
It was also underpinned by the Fed's hawkish stance on interest rates.
The U.S. central bank last week indicated it planned to raise rates next month and remained on track for two more potential hikes by mid-2019 on the back of an upbeat economy and rising wage pressures. Higher U.S. rates tend to boost the dollar and Treasury yields, adding pressure on greenback-denominated, non-yielding bullion.
"It seems like the bears are back in control," a Hong Kong-based trader said. "It's disappointing that every time gold starts to rally, it runs out of steam so fast." The precious metal has fallen more than 11 percent from its April peak, with investors piling into the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates. Macquarie commodity strategist Matthew Turner said he expects gold to fall below $1,200 by the end of the year. Meanwhile, hedge funds and money managers cut their net short position in gold by 8,136 contracts to 37,486 contracts in the week to Nov. 6, data showed on Friday. In other precious metals, silver was flat at $14.15 per ounce, having touched its lowest since Sept. 18 at $14.06 in the previous session. Palladium dipped 1 percent to $1,104.97 per ounce, while platinum rose 0.5 percent at $852.80 an ounce. (Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Jan Harvey)Outside U.S. +91 8067491638; Reuters Messaging: Sumita.Layek.email@example.com))