Gold prices inched lower Monday, with a stronger dollar weighing on the precious metal.
Gold for December delivery fell 0.2% to $1,295.40 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold had its worst week since early July last week and has fallen in consecutive weeks after hitting its highest level in more than a year earlier this month.
Many investors will be monitoring a series of speeches by Federal Reserve officials this week for clues about the future of the central bank's monetary policy. Gold prices fell last week after the Fed kept the option of a December interest-rate hike on the table while maintaining its projected path for rate increases through the end of next year. Gold struggles to compete with yield-bearing assets like Treasurys when borrowing costs rise.
The dollar rose following the Fed's latest policy discussion, making gold more expensive for foreign buyers. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently up 0.3% following its best two-week stretch of the year.
"The Fed is still in the driver's seat when it comes to gold," said Bob Haberkorn, senior market strategist at RJO Futures. "That statement that they put out last week was one of the most hawkish ones I've heard in a while," he said.
Expectations that the Fed might be hesitant to raise rates a third time this year amid sluggish inflation had supported gold prices before last week's meeting.
Gold prices were little changed Monday after Chancellor Angela Merkel's conservative alliance won the German election despite a steep drop in support and an anti-immigrant party surge, signaling possible turbulence ahead for Europe's largest economy.
Investors have also shaken off recent threats between the U.S. and North Korea, dampening the outlook for gold and other haven assets that tend to rise during times of geopolitical uncertainty.
Net bets by hedge funds and other speculative investors on a higher gold price fell for the first time since mid-July during the week ended Sept. 19, according to the latest Commodity Futures Trading Commission data released Friday.
Among base metals, copper for December delivery edged down 0.4% to $2.9335 a pound. The industrial metal has fallen in three straight weeks after hitting its highest level in almost three years earlier this month, with shaky data from China, a stronger dollar and a decline in speculative fervor contributing to losses.
Write to Amrith Ramkumar at amrith.ramkumar @wsj.com
(END) Dow Jones Newswires
September 25, 2017 10:31 ET (14:31 GMT)