Gold hovers near 3-month low

Singapore: Gold hovered near its lowest in three months on Tuesday after sharp overnight losses as the dollar traded at 14-month highs against a basket of major currencies, dimming the metal's appeal as a currency hedge.              

Fundamentals    

Spot gold was little changed at $1,255.20 an ounce .The metal closed down 1 percent on Monday, after earlier hitting $1,251.24 - its lowest since June.The dollar was boosted after a Federal Reserve study on interest rates and as the sterling was pressured amid ongoing jitters that Scotland could vote to secede from the United Kingdom.      

A research from the San Francisco Federal Reserve noted that investors are pricing in a lower trajectory for interest rate rises than members of the Fed itself. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.      

Investors were also eyeing developments geopolitical tensions over the Ukraine crisis. Russia signalled on Monday it might ban Western airlines from flying over its territory as part of an asymmetrical response to new European Union sanctions over the Ukraine crisis.