BENGALURU (Reuters) – Gold fell to its lowest in over three months early on Monday as the dollar hit a one-month high against the yen after U.S. Federal Reserve chief Janet Yellen said the central bank could raise interest rates in the coming months.
FUNDAMENTALS
* Spot gold had dropped 0.5 percent to $ 1,205.70 per ounce by 0044 GMT. Bullion touched a low of $ 1205.50 earlier in the session, its lowest since Feb. 22.
* U.S. gold was down 0.7 percent at $ 1,205.50.
* The Fed should raise interest rates “in the coming months” if the economy picks up as expected and jobs continue to be generated, Yellen said on Friday, bolstering the case for a rate increase in June or July.
* This week will provide investors with clues as to how far the Fed is from its next interest rate hike and whether the European Central Bank will see out the year without easing its monetary policy again.
* The dollar hit a one-month high against the yen early on Monday and stood tall against other peers after Yellen’s comments.
* Hedge funds and money managers cut their bullish bets in U.S. gold futures and options to their lowest in almost two months after the Fed indicated it could raise interest raise rates as early as June, data showed on Friday.
* U.S. economic growth slowed in the first quarter although not as sharply as initially thought, as a surge in home building and steady inventory accumulation partially offset the drag from a steep decline in business investment.
* The recent flow of gold from Britain via Switzerland to Asia went into reverse in March and April after a shift in expectations for U.S. interest rate hikes boosted investment in London, Swiss customs data shows.
* Kumtor Operating Company, part of Canada’s Centerra Gold, will be forced to halt operations at the Kumtor gold mine unless it receives environmental permits to continue beyond June, it said on Friday.
* Gold output in Australia, the world’s second biggest producer, slipped 2 percent in the first quarter, due in part to mining of lesser grade ores during a period of higher bullion prices, a survey released on Sunday showed.
DATA AHEAD (GMT)
0530 France detailed GDP Q1
0600 Germany import prices Apr
0645 France consumer spending Apr
0900 Euro zone business climate May
1200 Germany consumer prices May
(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph Radford)
