By Jan Harvey
LONDON — 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, boosting 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 had boosted the case for another rate rise, while Vice Chair Stanley Fischer said the US central bank was still on track to lift rates this year.
The CME Group’s FedWatch tool showed the market pricing in more than a 30% chance of a hike in September, up from 18% before Yellen and her deputy Fischer spoke. Spot gold touched its lowest since July 26 at $1,314.70, and was down 0.1% at $1,319.80 an ounce at 1.45pm GMT. US gold futures for December delivery were down $2.60 an ounce at $1,323.30.
"Weakness in gold prices is likely to extend over the next weeks, and we expect gold to steadily slide to $1,270 and below," Pradeep Unni, head of trading and research at Richcomm Global Services, said. "The case for a September rate hike seems to have clearly increased and most economic data feeds are showing improvements," he said. "September and December hikes seem to be on the cards and any further strength in data feeds will only (reinforce) this view." Gold’s volatility tracked fluctuations in the dollar.