• Gold fell 1 percent on Monday, touching a 2-1/2-week low, as the dollar strengthened and U.S. Treasury yields rose ahead of a two-day Federal Reserve meeting, while a world stock market index surged to a record and Wall Street also hit new highs.
Easing tensions on the Korean peninsula also reduced gold's safe-haven bid.
• Spot gold was down 1.04 pct at $1,305.46/oz by 2:05 p.m. EDT (18:05 GMT). The most active U.S. gold futures for December delivery settled down $14.40, or 1.09 percent, at $1,310.8 per ounce.
• On Sept. 8, gold's session high of $1,357.54 an ounce was the highest in 13 months. On Friday, U.S. data showed hedge funds and other speculators had raised net long positions in the precious metal for nine straight weeks.
• "There was a lot of speculative froth in the gold market which seems to have receded now," Commerzbank analyst Carsten Fritsch said in a telephone interview.
"Expectations that the Fed will raise U.S. interest rates argue for a correction here."
• Fed policy makers meet Tuesday and Wednesday. Investors expect the Fed will announce plans to start trimming its balance sheet, which should support the dollar and weigh on dollar-priced gold.
• World stocks hit a record high. But shares of gold mining companies fell sharply. U.S. Treasury yields rose.
• "Gold doesn't do well in a high rate environment," INTL FCStone analyst Edward Meir said in a telephone interview, noting that central banks have been tightening or moving toward tightening in Canada, England, Europe and the United States.
Gold's slide on Monday did not bring it as low as $1,300 an ounce. Meir said gold's support level on the charts was around $1,280 an oz while the $1,300 level "is more psychological."
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• Technically, December gold futures prices closed nearer the session low today. The gold bulls still have the overall near-term technical advantage, but have faded and now need to show fresh power soon to avoid serious near-term technical damage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,340.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at today’s high of $1,324.00 and then at $1,331.00. First support is seen at $1,307.00 and then at $1,300.00. Wyckoff's Market Rating: 6.5
• Spot silver was down 2.63 pct at $17.117/oz, while platinum fell 0.99 pct to $954.5/oz. Palladium was up 1.42 pct at $936.1/oz.
Reference: Reuters, Kitco
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