Gold languished near a six-week low on Monday, unable to recover from a three-day losing streak, as the dollar gained on signs of stabilisation in the U.S. economy, and fears the Federal Reserve would soon hike interest rates.
Spot gold was firm at $1,178.50 an ounce by 0042 GMT, not far from a six-week low of $1,170.20 reached on Friday.
The metal has lost about 2 percent in the past three sessions since the Fed signalled on Wednesday that it saw the recent slowdown in the U.S. economy as transitory and was not ruling out an interest rate rise this year.
A strong economy diminishes gold’s appeal as a haven, while higher rates could dent demand for non-interest-paying bullion.
The Fed could raise interest rates as soon as June, two top U.S. central bankers said on Friday, so long as economic data strengthens as expected from a dismal first quarter.
That view is at odds with the view of many traders, whose bets in the interest-rate futures markets suggest they have all but discounted a June rate hike and now expect the Fed to wait until December before raising rates for the first time since 2006.
Data on Friday continued to show mixed U.S. economic data. Consumer sentiment rose but manufacturing and construction was weak.
Source : Reuters