• Gold prices dropped on Monday as a stronger dollar outweighed the impact of uncertainty created by Italy's election result and fears of apossible global trade war.
• Spot gold lost 0.2 percent to $1,319.82 per ounce by 1:38 p.m. EST (1838 GMT), after touching its highest since Feb. 27 at $1,327.86. U.S. gold futures for April delivery settled down $3.50, or 0.3 percent, at $1,319.90 per ounce.
• "What might be supporting the dollar: expectations of Fed rate hikes have really increased over the last week or so," said Daniel Ghali, commodity strategist at TD Securities, after new Chair Jerome Powell's testimony indicated his optimistic outlook on the U.S. economy and opened the door for four interest rate hikes.
"Gold is supported because of the talk of trade wars. Whether they will occur or not will increase the probability of a policy mistake from the Fed that would obviously be bullish for gold," Ghali added.
• But support for gold came from U.S. President Donald Trump's announcement last week that the country would levy hefty tariffs on aluminum and steel imports. This was followed by threats of retaliation from the European Union and Canada.
In Italy, voters delivered a hung parliament on Sunday and if early projections are confirmed, none of Italy's three main groups will be able to rule alone and there is little prospect of a return to mainstream, moderate government.
• Technically, April gold futures prices closed nearer the session low today. The gold bulls and bears are on a level overall near-term technical playing field. However, prices are in a six-week-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,342.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at today’s high of $1,328.90 and then at $1,335.00. First support is seen at #1,315.00 and then at $1,309.00. Wyckoff's Market Rating: 5.0
• The market was anticipating the release of U.S. payroll data on Friday which will help guide interest rate expectations.
• Meanwhile, silver lost 0.5 percent to $16.40 per ounce, earlier touching $16.60, a one-week high.
• Platinum, used to reduce emissions in diesel cars, dropped 0.2 percent to $960.50 per ounce, while palladium slipped 0.9 percent to $982.47.
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