Gold prices inched lower on Monday, pressured by a firmer dollar, while investors awaited guidance from the US Federal Reserve on when it is likely to start withdrawing its bond-buying programme.
The dollar index hit a near one-month high, denting gold’s appeal for holders of other currencies.
The Fed is expected to open the door to reducing its monthly bond purchases when it meets on Sept. 21-22, while tying any actual change to US job growth in September and beyond.
Bullion is viewed as a hedge against the inflation and currency debasement likely from widespread stimulus. The Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.
US consumer sentiment steadied in early September, but consumers continue to have a bleak view of the outlook amid a stiff bout of inflation, a survey showed on Friday.
The London Bullion Market Association (LBMA) said on Friday it had suspended its accreditation of a gold refinery in Kyrgyzstan for failing to meet its responsible sourcing standards.
A pullback in domestic prices failed to revive physical gold demand in India last week, with jewellers banking on the upcoming wedding and festive season, while top consumer China saw an uptick in buying.
Speculators raised their net long positions in COMEX gold by 3,856 contracts to 87,395 in the week to Sept. 14, data from the US Commodity Futures Trading Commission showed.
Silver fell 0.3% to $22.33 per ounce, having hit its lowest level since Nov 2020 earlier in the session.
Platinum fell 0.1% to $940.39, while palladium gained 0.5% to $2,026.50.