Gold lost ground on Monday, moving closer to last week's 5-1/2-year lows below $1,100 per ounce, with expectations for a near-term US interest rate hike seen keeping momentum firmly with the bears. While the market has been fixated on US monetary policy, traders said further selling may have come on the back of a need to cover losses elsewhere as Chinese stock market indexes experienced their biggest one-day loss since 2007.
Spot gold was down 0.6 percent at $1,092.36 an ounce by 3:20 pm EDT (1920 GMT), after falling for a fifth straight week last week, the longest slide since late 2012. In contrast, US gold for August delivery settled up 1 percent at $1,096.40 an ounce on short-covering after data late Friday showed that US speculators had turned bearish on Comex gold for the first time in at least a decade in the week ended July 21. "The market is recouping some of its losses," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.
The Federal Reserve will hold a two-day meeting this week where policymakers are likely to send more signals pointing to a rate rise later in the year as the US economy strengthens. In other precious metals, spot palladium fell 1.9 percent to $610.50 an ounce and platinum lost 0.2 percent to $980.25. Silver was down 0.6 percent at $14.56.
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