Gold futures fell to an eight-month low on Monday, amid speculation the Federal Reserve may signal an early interest rate increase at this week’s policy meeting.On the Comex division of the New York Mercantile Exchange, gold for December delivery fell to a daily low of $1,226.40 a troy ounce, a level not seen since January 9.
Futures bounced back to last trade at $1,235.60 during European morning hours, up $4.10, or 0.33%.Gold was likely to find support at $1,218.60, the low from January 8 and resistance at $1,251.00, the high from September 11.
Also on the Comex, silver for December delivery inched up 3.2 cents, or 0.17%, to trade at $18.63 a troy ounce.In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting.
The dollar remained well bid amid speculation Fed officials could adopt more hawkish language, possibly by omitting mention of its commitment to keep rates low for a “considerable time”.The central bank was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Gold costs money to store and struggles to compete yield-bearing assets when interest rates are on the rise.Elsewhere in metals trading, copper for December delivery lost 2.4 cents, or 0.76, to trade at $3.083 a pound after data showed that China’s factory output grew at the weakest pace in nearly six years in August, adding to concerns over a slowdown in the world’s second largest economy.
Data released on Saturday showed that industrial production in China rose at an annualized rate of 6.9% in August, missing estimates for a gain of 8.8% and slowing from an increase of 9.0% a month earlier.