Article Highlights

  • Spot gold may drop to $1,261-$1,267/oz range
  • Specs reduce net longs in gold
  • Silver near 8-week low
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Gold slipped to its lowest in nearly seven weeks early on Monday as the U.S. dollar rose and equities gained, while growing expectations for a Federal Reserve interest rate hike in December also added to pressure.

Spot gold was down 0.4 percent at $1,273.60 an ounce by 0646 GMT, after earlier touching its lowest since mid-August at $1,272.35.

U.S. gold futures for December delivery shed 0.7 percent to $1,276.50.

The metal recorded its biggest monthly decline so far this year in September, despite netting a quarterly rise of 3 percent partly due to geopolitical tensions.

The dollar is a bit stronger and put gold under pressure first thing this morning, so we took out Friday’s low. China’s out for Golden week, so it’s just moving on the back of what the dollar-yen’s doing,” said a Hong Kong-based trader.

Gold might just keep drifting lower until the Chinese return. There’s nothing really to excite gold at the moment.” U.S. President Donald Trump on Sunday dismissed the prospect of talks with North Korea as a waste of time a day after his own secretary of state said the United States was maintaining open lines of communication with North Korea.

The dollar gained versus the yen and stood tall against the euro and other major counterparts on Monday and Asian shares rose as investors kept a close eye on an independence vote in Spain’s Catalonia.

The U.S. currency recorded its best week of the year on Friday, despite benign inflation data for August, partly lifted by expectations that the Fed would raise interest rates again in December.

Philadelphia Fed President Patrick Harker said on Friday he still has “penciled in” a rate hike in December, and three more hikes next year, in line with most of his colleagues at the central bank.

Higher interest rates tend to boost the dollar and push bond yields up, weighing on greenback-denominated, non-yielding bullion.

Spot gold may drop into a range of $1,261-$1,267 per ounce, as it has cleared a support at $1,277, Reuters technicals analyst Wang Tao said.

Speculators reduced their net long positions in COMEX gold and silver contracts in the week to Sept. 26, U.S. data showed on Friday.

Silver edged down 0.2 percent to $16.57 an ounce after earlier in the session marking its lowest since Aug. 9.

Platinum and palladium were little changed at $910 and $933.75 an ounce, respectively.

Platinum continued to trade at a discount to palladium for a fourth consecutive session.