Gold around three-month low

SINGAPORE, Sept 11 (Reuters): Gold was trading near a three-month low on Thursday, hit by fears of an early hike in U.S interest rates, a stronger dollar and an apparent easing of tensions over Ukraine.
With the dollar index trading near a 14-month peak on Thursday on increasing speculation that the U.S. Federal Reserve could soon raise rates, bullion investors were eyeing any uptick in physical demand in Asia for price support.
Gold may continue to struggle until the Federal Reserve's two-day policy meeting next week that could provide clues on when the U.S. central bank would hike rates. Higher rates would dent demand for non-interest yielding assets such as gold.
Spot gold slipped 0.1 per cent to $1,247.10 an ounce by 0628 GMT, after dropping 0.6 per cent on Wednesday, when it hit a three-month low of $1,243.56.
"While gold may face further pressure in the current macro environment, a pick-up in physical demand would help stem the possibility for further losses," HSBC analysts said in a note.