· Gold fell to a near five-week low on Monday as the dollar rose after hawkish comments from a top Fed official, but uncertainty created by the start of talks on the terms of Britain's departure from the European Union prevented deeper losses.
· Spot gold <XAU=> was down 0.7 percent at $1,244.85 an ounce by 2:35 p.m. EDT (1835 GMT), after falling below the 100-day moving average to $1,244.27, its lowest since May 17. U.S. gold futures <GCcv1> settled down 0.8 percent at $1,246.70.
· New York Federal Reserve President William Dudley said U.S. inflation is a little low but should rise alongside wages as the labor market improves, allowing the Fed to continue gradually tightening U.S. monetary policy.
· The potential for higher rates reinforced the uptrend in the dollar <.DXY>, which, when it rises, makes dollar-denominated commodities more expensive for holders of other currencies, potentially weakening demand.
· "The dollar is a large part of what's going on with gold," said ING commodities strategist Warren Patterson. "I do see some support from uncertainty about the UK government and the start of Brexit negotiations."
· British Prime Minister Theresa May's failure to win a parliamentary election this month has, alongside Brexit negotiations starting on Monday in Brussels, fueled political uncertainty.
· Technically, August gold futures bulls and bears are on a level overall near-term technical playing field, but the bears have the momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,284.20. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,225.00. First resistance is seen at the overnight high of $1,257.30 and then at $1,268.50. First support is seen at $1,240.00 and then at $1,230.00. Wyckoff’s Market Rating: 5.0
· Silver <XAG=> lost 0.3 percent to $16.54 an ounce.
Reference: Reuters, Kitco
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