Gold fell 1 percent on Monday ahead of a Federal Reserve policy meeting this week, which is expected to announce the first interest rate rise in nearly a decade. Investors have been cutting gold positions in anticipation of a rate increase and the metal has fallen about 10 percent so far this year. Higher rates could dent demand for the non-interest paying asset, while also boosting the dollar.
Spot gold eased 0.8 percent to $1,065.10 an ounce at 2:56 pm EST (1956 GMT), while US gold futures for February delivery settled 1.1 percent lower at $1,063.40 an ounce. "Gold's downtrend persists, with initial support around $1,062-$1,063, a break of which could see prices back to their December lows (at $1,045)," ActivTrades chief analyst Carlo Alberto de Casa said.
Bullion prices held technical support just above $1,060, a short-term Fibonacci retracement level from the December 4 high to the December 3 low. "It's coming into critical support. If it holds right here, we can go higher," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago. Meanwhile, spot silver hit its lowest since August 2009 at $13.60 an ounce. Palladium rose 0.9 percent to $547.10 an ounce while platinum was up 1 percent at $853.50 an ounce.
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