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Gold held near a three-month low as investors weighed the outlook for higher U.S. interest rates before the Federal Reserve begins a two-day meeting. Platinum extended losses to the lowest level since 2009.

Bullion for immediate delivery fell 30 cents to $1,154.51 an ounce by 2:13 p.m. in Singapore, according to Bloomberg generic pricing. The metal slumped to $1,147.72 on March 11, the lowest level since Dec. 1.

Key to the debate for the Fed’s March 17-18 meeting will be whether the economy has gained enough steam to warrant removing a pledge to be “patient” on raising borrowing costs. While an improving labor market bolstered speculation rates will be increased for the first time since 2006, data on Monday showed manufacturers cut production unexpectedly in February and homebuilder confidence fell in March.

 “All but half a handful of economists expect the word ‘patient’ to be removed from its forward guidance,” analysts from IG Markets Ltd. wrote in an e-mailed note.

A 0.2 percent decline in factory output followed a revised 0.3 percent drop in January, according to central bank figures issued on Monday. Confidence among residential builders unexpectedly dropped to an eight-month low, data from the National Association of Home Builders/Wells Fargo showed.

The dollar surged to the highest in a decade last week and hedge funds exited gold at the fastest pace in more than four months as employers added more jobs than expected in February and the unemployment rate declined to the lowest in almost seven years. The Bloomberg Dollar Spot Index fell on Monday after climbing for a fourth week in the period ended March 13.

Gold for April delivery dropped 16 cents to $1,154.65 on the Comex. Assets in exchange-traded products backed by gold fell for a 14th day on Monday, data compiled by Bloomberg show.

Platinum for immediate delivery dropped as much as 0.6 percent to $1,101.05 an ounce, the lowest since 2009, before trading at $1,105. Silver lost 0.4 percent to $15.587 an ounce. Palladium fell 0.8 percent to $773.70 an ounce, the lowest since Feb. 13.

Source: Bloomberg

Linh Nhan