Gold Close to 5 Year Low Awaiting FOMC

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 U.S. interest rate hike seen keeping momentum firmly with the bears.

While the market has been fixated on U.S. monetary policy, traders said further selling on Monday 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.

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 U.S. economy strengthens.

Spot gold was down 0.5 percent at $1,092.90 an ounce by 1158 GMT, after falling for a fifth straight week last week, the longest slide since late 2012.

U.S. gold for August delivery was up 0.6 percent at $1,092 an ounce.

Bullion lost more than 3 percent last week after a sudden, sharp rout across New York and Shanghai markets sparked further selling, sinking prices to $1,077 on Friday, their lowest since February 2010.

via Reuters

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