Gold hits one-week low on US rate hike prospects

Gold fell on Monday to its lowest in over a week as the dollar strengthened after comments from U.S. Federal Reserve officials increased bets on a US rate hike this year.


* Spot gold was down 0.3 percent at $1,337.12 an ounce at 0101 GMT, after touching a low of $1,334.20, a level not seen since Aug. 12. * U.S. gold dropped 0.4 percent to $1,341.20 an ounce.
* The Fed is close to hitting its targets for full employment and 2 percent inflation, the Fed’s No. 2 policymaker Stanley Fischer said on Sunday in comments that did not address when the U.S. central bank should next raise interest rates.
* New York Fed President William Dudley said last week a rate hike would be possible at the Fed’s next policy meeting in September, though interest rate futures contracts indicate that market is pricing in about 50/50 odds of an increase in December.
* Amid conflicting signals from the Fed in recent days, central bankers from around the world will gather from Aug. 25 for an annual meeting in the mountains of Jackson Hole, Wyoming, with Chair Janet Yellen due to speak the following day.
* Japanese companies overwhelmingly say the government’s latest stimulus will do little to boost the economy and the Bank of Japan should not ease further, a Reuters poll showed, a setback for policymakers’ efforts to overcome deflation and stagnation.
* The dollar index, which tracks the greenback against a basket of six major rivals, was up 0.3 percent in early trade at 94.796, pulling away from last week’s low of 94.077, which was its weakest since June 24.
* Hedge funds and money managers again decreased their bullish positions in COMEX gold and silver contracts in the week to Aug. 16, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
* Physical gold demand in Asia improved modestly this week as consumers returned to the market ahead of upcoming festivals in India and China when demand is usually high.
Source: Reuters

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