Gold fell on Monday, extending a second straight week of losses, as a recovery in risk appetite supported stock markets near nine-month highs ahead of central bank meetings this week in the United States and Japan.
The world's major economies pledged at a G20 meeting this weekend, dominated by last month's British vote to leave the European Union, to use all policy tools available to boost growth. That lifted both shares and the dollar, weighing on gold.
Spot gold was down 0.5 percent at $1,314.87 an ounce at 0935 GMT, while U.S. gold futures for August delivery were down $8.60 an ounce at $1,314.80.
Gold eased for a second week last week, by 1.2 percent, after rallying to its highest in more than two years in early July in the wake of the Brexit vote, which drove up demand for the metal as a haven from risk.
"At the moment gold is struggling a bit because there is lower safe-haven demand, and at the same time you have the Fed (meeting) coming up, which is making people a bit more cautious," ABN Amro analyst Georgette Boele said.
"You have these massive speculative positions still out there, and they are vulnerable if the Fed is more hawkish than expected."
Speculators cut their record bullish bets on COMEX gold futures and options for a second straight week, taking the total to its lowest in a month, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. Even so, they remain highly elevated.
"Speculative financial investors withdrew from gold for the second consecutive week in the week to 19 July," Commerzbank said in a note. "In absolute terms, however, net long positions are still at a very high level, meaning that there is further correction potential for the gold price from this side."
"A massive overhang of bets on rising prices is also hanging over silver like the sword of Damocles," it added.
Silver, which fell about 3 percent last week, was down 0.8 percent to $19.45.
Platinum was down 0.3 percent $1,073 an ounce. Palladium, which hit a near-nine month high on Friday, was down 1 percent at $673.47.
It registered its fifth weekly gain last week, rising 5 percent as sharper appetite for risk helped the more industrial precious metal catch up with its peers, which it had lagged in the weeks after the Brexit vote. (Reuters)
Source: www.businessworld.ie
