Gold prices recovered slightly after touching a near 10-month low in early trade on Thursday as the dollar index eased, but growing odds of a US interest rate hike capped further gains. Spot gold was up 0.25 percent at $1,175.36 an ounce by 0711 GMT. The metal hit its lowest since February 5 at $1,163.45 earlier in the session. US gold futures rose about 0.3 percent to $1,173.80 per ounce. The dollar index, which measures the greenback against a basket of major currencies, eased 0.26 percent to 101.240.
"Gold has been sensitive to the US monetary policy and dollar movements," said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "Inflation as well as pace of interest rate hike expectations among the investors are increasing along with the opportunity cost of holding gold." The metal has been under constant pressure from a strong US dollar and climbing Treasury yields since President-elect Donald Trump's policy plan signalled faster inflation. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.13 percent to 883.86 tonnes on Wednesday.
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