* Gold seen below $1,100 as rate hike becomes imminent -
Wing Fung
* Dollar near 7-month top as Fed may raise rates in December
(Updates prices)
By Manolo Serapio Jr
MANILA, Nov 10 (Reuters) - Gold was mired near a three-month
low on Tuesday on expectations the U.S. Federal Reserve was well
on track to raise interest rates before the end of the year.
A forecast-beating U.S. October employment report on Friday
pushed up bets that the Fed will increase interest rates in
December for the first time in nearly a decade, weighing on the
price of non-interest bearing gold.
"Gold will stay below $1,100 as the interest rate hike
becomes more and more imminent," said Mark To, head of research
at Hong Kong's Wing Fung Financial Group.
Spot gold XAU= was little changed at $1,092.35 an ounce by
0646 GMT. Bullion ended an eight-day losing run on Monday, but
not enough to pull it far away from Friday's low of $1,084.90,
its weakest since Aug. 7.
Following bullion's recent steep drop, MKS Group trader
James Gardiner said "a bounce, or at least a consolidation, is
well overdue". He pegged the next support level for gold at
around $1,074 and then at $1,050.
The dollar hovered near a seven-month peak against a basket
of major currencies, spurred by growing expectations for a U.S.
rate hike next month. USD/
U.S. gold for December delivery GCcv1 gained 0.4 percent
to $1,092.10 an ounce.
After a potential rate hike in December, the U.S. central
bank may take its time in raising rates further which should be
broadly supportive for gold, said INTL FCStone analyst Edward
Meir.
But Meir said the metal faces more weakness in the near term
and "poor technicals and a buoyant dollar do not help gold's
upside case much either".
While the market braces for a U.S. rate hike, a consensus is
forming at the European Central Bank to take the interest rate
it charges banks to park money deeper into negative territory in
December, in a move that could weaken the euro and push up
inflation.
Spot platinum XPT= gained 0.3 percent to $912.49 an ounce
after coming close to Monday's one-month low $904.75. Palladium
XPD= rose 0.3 percent to $597.25 an ounce and silver XAG=
slipped 0.4 percent to $14.48.