MANILA (Reuters) – Gold edged lower on Monday, stretching last week’s losses on concern that the Federal Reserve is on course to raise interest rates this year despite recent market turmoil.
FUNDAMENTALS
Spot gold was down 0.2 percent at $ 1,131.30 an ounce by 0107 GMT, after dropping more than 2 percent last week in its steepest decline in five weeks.
U.S. gold for December delivery eased 0.3 percent to $ 1,131.10 an ounce.
The Fed left the door open to a September interest rate hike even while several U.S. central bank officials acknowledged that turmoil in financial markets, if prolonged, could delay the first policy tightening in nearly a decade.
Some top policymakers, including Fed Vice Chairman Stanley Fischer, said recent volatility in global markets could quickly ease and possibly pave the way for the U.S. rate hike, for which investors, governments and central banks around the world are bracing.
But hedge funds and money managers hiked a bullish bet in COMEX gold and raised their net long position in silver futures and options in the week ended Aug. 25, U.S. Commodity Futures Trading Commission data showed on Friday.
A stronger U.S. dollar is helping drive Australian gold production and buffeting local prospectors from the effects of a global sell-off in bullion, according to a sector survey released on Sunday.
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)
