Gold hits near 5-week low after Fed strikes hawkish note
Gold slid to a near five-week low on Monday after comments from top Federal Reserve officials fuelled speculation that US interest rates would rise sooner rather than later, weighing on the dollar.
Speaking at a meeting of leading central bankers in Jackson Hole, Wyoming, Fed chair Janet Yellen said on Friday that an improvement in the economy and the labour market in recent months had boosted the case for hiking rates.
The CME Group's FedWatch tool showed the market pricing in more than a 30 percent chance of a hike in September, up from 18 percent before Yellen and her deputy Stanley Fischer spoke. Spot gold touched its lowest since July 26 at $1,314.70, and was down 0.2 percent at $1,318.66 an ounce at 0915 GMT. US gold futures for December delivery were down $4 an ounce at $1,321.90.
Gold whipsawed on Friday, rising as much as 1.5 percent in the immediate wake of Yellen's comments, before slipping back to end the day marginally lower.
"The market was surprised (by Yellen) -- that is why it went all the way up first, before losing it all," Afshin Nabavi, head of trading at MKS in Switzerland, said.
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