Gold fell on Monday as Asian shares reversed early losses and investors waited for a US Federal Reserve meeting later this week for an outlook on the central bank's bond buying programme. The Fed meets on June 18-19 against a backdrop of stronger-than-expected data on US retail sales and the job market, with markets looking for clues to any tapering of its economic stimulus programme.
"The markets are a little bit fatigued at the moment," said Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group. "They are still looking for direction from the Fed meeting. That's clearly the big driver this week." Spot gold fell 0.2 percent to $1,387.61 an ounce by 0650 GMT. Bullion closed up about 0.5 percent for the week on Friday helped by strong demand for coins and bars, a pullback in US stocks and rising tensions in the Middle East. US gold was little changed at $1,387.30, while Asian shares reversed early losses.
Gold prices were supported by some buying in China, the No 2 bullion consumer in the world after India. Shanghai gold futures were up 0.2 percent on Monday. However, demand in Asia has cooled from peak levels seen after the mid-April sell-off in gold. Bullion is down 17 percent for the year after 12 years of annual gains. Gold output in Australia, the No 2 producer behind China, fell 5 percent in the first quarter on weather-related disruption to 63.5 tonnes, according to the latest Gold Quarterly Review by Surbiton Associates.
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