(MENAFN- Khaleej Times)Gold fell on Monday extending last week's slide as indications the Federal Reserve may still raise interest rates this year despite recent market turmoil offset a retreat in the dollar.
Spot gold fell 0.4 per cent to $1129.01 an ounce by 1348 GMT while US gold futures for December delivery dropped $5.50 an ounce to $1128.50. Gold fell 2.3 per cent last week after a slide in Chinese equities rattled wider markets. The Federal Reserve left open the possibility of a September rate rise at a central banking conference at Jackson Hole Wyoming at the weekend though several officials indicated that prolonged financial market turmoil might delay such a move. Fed Vice Chairman Stanley Fischer said on Saturday that US inflation was likely to rebound as pressure from the dollar fades allowing for a gradual rise in rates. "Last week it was felt that maybe the Fed would postpone the interest rate hike to December but now after the latest comments you can say that it's still possible that it will be in September" LBBW analyst Thorsten Proettel said. "Of course that is a burden for the gold price." "People are waiting to see what's going on in China. That and the interest rate decision will be the most important factors for the gold price over the next days and weeks." Global financial markets looked set for another rough week on Monday with stocks commodities and the dollar losing ground ahead of US data and surveys that are likely to point to further weakness in China. - Reuters The market is particularly awaiting Friday's US non-farm payrolls report for August a key economic indicator. Gold is still on track to end August higher after worries over a slowing Chinese economy sparked a wave of short-covering earlier this month following the metal's slide to five-and-a-half-year lows in July. Some had initially thought a slowdown in China might prompt the Fed to postpone a rate rise. Hedge funds and money managers raised bullish bets in Comex gold in the week ended August 25 US Commodity Futures Trading Commission data showed. However investor sentiment remains fragile. "Neither current concerns about China nor a potential postponement of the first interest rate hike in the United States should significantly revive investment demand for gold" Julius Baer said in a note. Spot silver fell one per cent to $14.45 an ounce while platinum dropped 1.7 per cent to $998.49 and palladium slipped 0.6 per cent to $586.75. - Reuters
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