Gold prices fell to one-year lows on Monday as traders tackled the latest growth figures in the US, which will be released later this week.
At 11:28 ET (15:28 GMT), gold futures for August delivery to the Comex division of the New York Mercantile Exchange fell $ 7.00 or 0.6% to $ 1,224.10 per troy ounce.
It was not far from last week’s low of $ 1,211.70, the weakest level since July 11, 2017.
Gold prices ended last week’s one-year low following US President Donald Trump’s attack on the Federal Reserve late Thursday, claiming that their plans to raise US interest rates undermined efforts to strengthen the economy would.
Trump criticized his criticism of the Fed on Friday by suggesting on Twitter that a tighter monetary policy would punish the US by contributing to a stronger dollar.
However, the recovery of the yellow metal was short-lived as investors looked at Friday’s US GDP report to see how the economy developed in the second quarter. The data is expected to show that growth in the three months to June has recovered from an increase in consumer spending.
Consensus expects strong growth of 4.1%, more than doubling its expansion in the first three months. The Federal Reserve Bank of Atlanta is currently forecasting a stronger increase of 4.5%, while a Bloomberg survey of economists has yielded some forecasts of up to 5.4%.
Barclays analysts pointed to the strong data from last week and increased their own estimate of GDP in the second quarter by a cumulative three-tenths to 5.3%.
A stronger than expected value would support the Fed’s plans to progressively raise interest rates.
Fed funds futures are currently pricing in a quarter-rate hike for September, with the likelihood of a second rise to 65% in December, according to Fed Rate Monitor Tool.
Higher interest rates tend to weigh on demand for non-interest-bearing gold in favor of high yielding assets.
In futures trading, silver futures lost 1.30% ET (15:30 GMT) 1.02% at $ 15,390 a troy ounce.
Palladium futures rose 1.41% to $ 901.40 per ounce, while platinum from its sister metals fell 0.02% to $ 8829.30.
For base metals, copper fell 0.4% to $ 2.745 per pound.