By Katy Barnato
Gold fell to a two-week low on Monday following upbeat comments on the U.S. economy from a senior Federal Reserve official.
Spot gold traded at around $1,333.40 per ounce at the start of the trading week, after Fed Vice Chairman Stanley Fischer told a conference in Aspen, Colorado, Sunday that an interest rate hike was still under consideration for this year and that economic growth would accelerate.
"I think that as U.S. data has surprised to the upside recently … the Fed prepares for a hike … it is understandable that gold comes under pressure, especially in these quiet summer months when liquidity is not great," Joni Teves, UBS strategist, told CNBC on Monday.
Bullion has gained over 25 percent this year, as commodity prices recover and investors continue to look for "safe haven" investments amid global economic uncertainty and a depressed bond yield environment.
"Apart from January, we have a pretty positive rally and that has been very much helped by the China simmers we saw at the start of the year," David Wilson, director of metals research and strategy at Citi, told CNBC on Monday.
He said this year's rally in commodities was a slightly overblown.