MTECHTIPS- Gold prices edged lower in the first trading session of the new year on Tuesday, erasing overnight gains as the U.S. dollar resumed its rally with markets focused on the possibility of further U.S. interest rate hikes in 2017. Gold for February delivery on the Comex division of the New York Mercantile Exchange shed $3.95, or 0.35%, to $1,147.85 a troy ounce by 9:20 AM ET (14:20 GMT). Prices rose to a session high of $1,159.25 earlier. The gold market was closed on Monday after the New Year’s holiday. The U.S. dollar resumed its rally on Tuesday, climbing back toward its 14-year-high against a basket of currencies as the prospect of rising U.S. interest rates this year kept sentiment bullish. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up more than 1% at 103.42 in early trade, within sight of a 14-year peak of 103.62 touched on December 20. Market analysts warned that the outlook for gold remains cloudy in the near-term amid expectations of U.S. interest rates rising more rapidly during the incoming Trump Administration. Prices of the yellow metal have fallen sharply since Donald Trump was elected president as a soaring U.S. dollar, rising Treasury yields and a record-breaking rally on Wall Street have dampened its appeal.